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Venezuela Seen Getting Off 'Lightly' In $908 Million Exxon Payment

Author: Vyas, Kejal; Gonzalez, Angel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2012: n/a.

Abstract:

The verdict comes four years after Exxon, the world's largest publicly traded oil company, left Venezuela in a spat with the country's government, which decreed that the state oil monopoly would have the majority stake in joint ventures with foreign partners.

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CARACAS -- An international arbitration panel awarded U.S. oil major Exxon Mobil Corp. about $908 million in a verdict over oil assets nationalized by Venezuelan President Hugo Chavez in 2007, the company said late Saturday.

The payout is substantially lower than the $7 billion that Exxon was seeking in restitution and is likely to be a boon for Venezuela's defiant leftist government, which in recent years has embarked on a widespread nationalization campaign to centralize control over key economic sectors.

"It's a nice Christmas present for Chavez and Venezuela," said Russ Dallen, an analyst and bond trader at local investment bank Caracas Capital Markets. "The verdict is a lot less than people were probably thinking. It certainly means that [state oil company Petroleos de Venezuela SA or PdVSA] got off lightly," Dallen added.

Exxon spokesman Patrick McGinn said the decision by an arbitration court at the International Chamber of Commerce, "confirms that PdVSA does have a contractual liability to Exxon Mobil."

A PdVSA spokesman declined comment when reached by telephone on Sunday.

Both parties are still awaiting a decision on the suit filed by Exxon's local subsidiary, Mobil Cerro Negro Ltd., against Venezuela in front of the World Bank's International Centre for Settlement of Investment Disputes, or ICSID, where the Chavez administration is facing around 20 pending cases. With billions in potential payouts looming, the number of cases has been the source of constant concern for holders of Venezuelan sovereign bonds.

Exxon has said that it invested around $750 million into the Cerro Negro facility. The company reduced its claim to $7 billion from an initial claim of $12 billion.

Despite the smaller-than-expected compensation for Exxon, the money is still a substantial chunk of change for PdVSA, which posted a net profit of $4 billion during the first six months of 2011. The Venezuelan oil monopoly has faced declining oil production and cash flow problems in recent years as Chavez diverts large portions of revenue toward social projects, which critics say has resulted in insufficient investments into maintenance.

Earlier this year, Venezuelan Oil Minister Rafael Ramirez said his government planned to pay no more than a total of $2.5 billion between its arbitration cases with Exxon and ConocoPhillips. Fellow oil major Chevron Corp., the second-largest U.S. oil company, decided to accept PdVSA's majority stake and remained in Venezuela.

In September, Mr. Ramirez also threw out the possibility of settling with Exxon outside of courts, shortly after the country's prosecutor general told reporters that the $6 billion settlement was being negotiated.

The Cerro Negro project had an estimated value of around $2 billion and is located in Venezuela's massive and still mostly untapped Orinoco heavy oil belt. It is a legacy of Venezuela's temporary bid to open up its oil industry to foreign players in the 1990's, at a time when oil was cheap and large investments were needed for the first wave of heavy oil projects. The facility has since had its name changed to Petromonagas and currently processes some 120,000 barrels of heavy crude oil a day. PdVSA is the majority owner, while Anglo-Russian oil joint venture TNK-BP holds a 16.7% stake and has said that it is interested in purchasing Exxon's former share from PdVSA.

Credit: By Kejal Vyas And Angel Gonzalez

Subject: Petroleum industry; Petroleum production; Nationalization; Equity stake

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 1, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 913195903

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/913195903?accountid=7117

Last updated: 2017-11-19

Database: The W all Street Journal

Venezuela Seen Getting Off 'Lightly' In $908 Million Exxon Payment

Author: Vyas, Kejal; Gonzalez, Angel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2012: n/a.

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Abstract:

CARACAS, Venezuela--An international arbitration panel awarded Exxon Mobil Corp. about $908 million in a verdict over oil assets nationalized by Venezuelan President Hugo Chavez in 2007, the company said late Saturday.

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The payout was substantially lower than the $7 billion that Exxon was seeking in restitution and is likely to be a boon for Venezuela's defiant leftist government, which in recent years has embarked on a widespread nationalization campaign to centralize control over key economic sectors.

State oil company Petroleos de Venezuela SA "got off lightly," said Russ Dallen, an analyst and bond trader at Caracas Capital Markets.

An Exxon spokesman said the decision, by an arbitration court at the International Chamber of Commerce, "confirms that PdVSA does have a contractual liability to Exxon Mobil."

A PdVSA spokesman declined to comment.

Both parties are awaiting a decision on the suit filed by Exxon's local subsidiary, Mobil Cerro Negro Ltd., against Venezuela in front of the World Bank's International Centre for Settlement of Investment Disputes, where the Chavez administration is facing around 20 cases. With billions of dollars in potential payouts looming, the number of cases has been a source of concern for holders of Venezuelan sovereign bonds.

Four years ago, Exxon, the world's largest publicly traded oil company, left Venezuela in a spat with the government, which decreed that the state oil monopoly would have the majority stake in joint ventures with foreign partners. PdVSA now holds at least 60% of all oil projects.

Exxon has said it invested around $750 million into the Cerro Negro facility. The company reduced its claim to $7 billion from an initial claim of $12 billion.

Despite the smaller-than-expected compensation for Exxon, the money is still a substantial chunk of change for PdVSA, which posted a net profit of $4 billion during the first half of last year. The monopoly has faced declining oil production and cash-flow problems in recent years as Mr. Chavez has diverted large portions of revenue toward social projects. Critics have said that caused insufficient investment in maintenance.

Venezuelan Oil Minister Rafael Ramirez has said the government planned to pay no more than a total of $2.5 billion between its arbitration cases with Exxon and ConocoPhillips. Chevron Corp., the second-largest U.S. oil company, decided to accept PdVSA's majority stake and remained in Venezuela.

Mr. Ramirez in September threw out the possibility of settling with Exxon out of court, shortly after the country's prosecutor general told reporters that the $6 billion settlement was being negotiated.

Credit: By Kejal Vyas And Angel Gonzalez

Subject: Petroleum industry; Arbitration

Location: United States--US

People: Chavez, Hugo

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 2, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 913266661

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/913266661?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Panel Deals a Setback to Exxon in Venezuela

Author: Vyas, Kejal; Gonzalez, Angel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2012: n/a.

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Abstract:

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The payout was substantially lower than the $7 billion that Exxon was seeking in restitution and is likely to be a boon for Venezuela's leftist government, which in recent years has embarked on a nationalization campaign to centralize control over key economic sectors.

State oil company Petróleos de Venezuela SA said Monday it will pay Exxon a total of $255 million--after subtracting existing debt--over the next 60 days.

Analysts said the panel's verdict appears to be a victory for Mr. Chávez, who in 2007 seized the U.S. oil giant's Cerro Negro project as part of a wide-scale expropriation campaign.

Exxon spokesman Patrick McGinn said in a statement that the $908 million award by the arbitration panel at the International Chamber of Commerce "represents recovery on a limited, contractual liability of PdVSA that was provided for in the Cerro Negro project agreement."

Of that amount, however, $160 million has already been credited and the remaining $747 million can be paid in cash or by canceling debt.

In a statement Monday, PdVSA said it will subtract from the verdict a series of debts owed by Exxon, including $191 million for purchasing bonds tied to the financing of the Cerro Negro project.

The company, which called the verdict a "successful defense," will also deduct around $300 million for its New York bank accounts that Exxon had successfully managed to have frozen during the early phases of legal actions in 2007. It said the remaining $160 million was awarded by the ICC in counterclaims.

PdVSA called Exxon's claims "exaggerated" and said they "defied logic." The Venezuelan state oil monopoly also pledged to defend itself should Exxon continue to pursue the case.

PdVSA is "netting out other credits, as allowed by the ICC; they are not repudiating the award," said Nomura analyst Boris Segura. He added that in the end the decision is favorable for the Venezuelan government.

To be sure, the South American government may eventually have to pay more to Exxon as both parties await a verdict on a separate suit filed by Exxon's local subsidiary, Mobil Cerro Negro Ltd., against Venezuela before the World Bank's International Centre for Settlement of Investment Disputes, or ICSID.

Exxon's Mr. McGinn said the "larger" ICSID case "is ongoing and is expected to be argued in February."

The Chávez administration currently faces around 20 pending cases at the ICSID. With billions in potential payouts looming, the number of cases has been a concern for holders of Venezuelan sovereign bonds.

The court decision came four years after Exxon left Venezuela in a dispute with the government, which decreed that the state oil monopoly would have the majority stake in joint ventures with foreign partners. By law, PdVSA now holds at least 60% of all oil projects.

Exxon has said it invested around $750 million into the Cerro Negro facility. The company reduced its claim to $7 billion from an initial claim of $12 billion.

Despite the smaller-than-expected ICC panel's compensation for Exxon, the money is still a substantial chunk of change for PdVSA, which posted a net profit of $4 billion during the first half of last year. The monopoly has faced declining oil production and cash-flow problems in recent years as Mr. Chavez has diverted large portions of revenue toward social projects. Critics have said that caused insufficient investment in maintenance.

Write to Kejal Vyas at kejal.vyas@dowjones.com and Angel Gonzalez at angel.gonzalez@dowjones.com

Credit: By Kejal Vyas And Angel Gonzalez

Subject: Petroleum industry; Arbitration

People: Chavez, Hugo

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 3, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 913285802

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/913285802?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Exxon Mobil Reviews Japan Operations

Author: Sposato, William; Maxwell, Kenneth

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2012: n/a.

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Abstract:

While the U.S. giant said it has "no plans to exit the Japanese market," the talks come as Western oil majors put existing operations under the microscope, redrawing the map to adapt to the changing topography of future energy sources and demand.

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TOKYO--Exxon Mobil Corp. said it is in talks with its majority-controlled Japanese unit, TonenGeneral Sekiyu KK, regarding the possibility of restructuring its nearly $3 billion stake in the oil refiner.

While U.S.-based Exxon said it has "no plans to exit the Japanese market," the talks come as major Western oil companies scrutinize their existing operations in efforts to adapt to the changing topography of future energy sources and demand. Meanwhile, Japan's own refiners are trying to adjust to a long-term slide in gasoline demand as the sluggish domestic economy drives consolidation pressures in the industry.

Exxon, which owns a 50.2% stake in TonenGeneral, Japan's second-biggest refiner by capacity, said in a written statement that it is in discussions with TonenGeneral "about the potential restructuring of its holdings in Japan but no decisions have been made."

Earlier, Reuters reported that Exxon was looking to sell most of its stake in the Japanese refiner and sell other assets in Japan in a deal valued at roughly $5 billion. The report spooked investors in the Japanese company, in which Exxon Mobil has been an investor since 2000, sending the shares as much as 7.5% lower at one stage Wednesday.

TonenGeneral shares closed off 5.8% at ¥792 ($10.32) in Tokyo, while the benchmark Nikkei 225 Stock Average rose 1.2%.

The U.S. oil company said in its statement that reports suggesting it would retreat from Japan are "not based on statements by Exxon Mobil. We have made no announcements and, as a matter of practice, we do not comment on market rumors or speculation." In a separate written statement, TonenGeneral echoed Exxon Mobil's comments.

Japan's refiners cranked up output to meet a temporary spike in demand after the March 11 earthquake and tsunami, but the industry has been contracting for years amid the country's sluggish economy and as energy-efficient machinery--including gasoline-electric hybrid autos--becomes more prevalent.

That has saddled the refining industry with a significant overcapacity problem, triggering costly plant closures in recent years. In November, Idemitsu Kosan Co. said it would permanently close a 120,000-barrel-a-day crude-distillation unit at its Tokuyama refinery in western Japan in March 2014.

The trend has also triggered industry consolidation. In April 2010 JX Holdings Co. was created by integrating Nippon Oil Corp., the country's largest refiner by capacity, and Nippon Mining Holdings Inc., the country's largest copper smelter, which also had oil refining operations.

Meanwhile, Exxon has been gradually distancing itself from refining and marketing globally. The shift comes as Western energy companies adapt to a boom in exploration for hydrocarbons such as shale gas and oil sands once considered too difficult and expensive to extract, but that are now being exploited from Australia to Canada.

Write to William Sposato at william.sposato@dowjones.com and Kenneth Maxwell at kenneth.maxwell@dowjones.com

Credit: By William Sposato And Kenneth Maxwell

Subject: Petroleum industry; Equity stake; Consolidation

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: TonenGeneral Sekiyu KK; NAICS: 324110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 4, 2012

column: Heard on the Street

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 913426099

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/913426099?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Corporate News: Exxon Reviews Japan Operations

Author: Sposato, William; Maxwell, Kenneth

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Jan 2012: B.8.

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TOKYO -- Exxon Mobil Corp. said it is in talks with its majority-controlled Japanese unit, TonenGeneral Sekiyu KK, regarding the possibility of restructuring its nearly $3 billion stake in the oil refiner.

Earlier, Reuters reported that Exxon was looking to sell most of its stake in the Japanese refiner and sell other assets in Japan in a deal valued at roughly $5 billion.

The report spooked investors in the Japanese company, in which Exxon has been an investor since 2000.

TonenGeneral shares closed off 5.8% at 792 yen ($10.32) in Tokyo on Wednesday.

The Irving, Texas-based energy company said in its statement that reports suggesting it would retreat from Japan are "not based on statements by Exxon Mobil. We have made no announcements and, as a matter of practice, we do not comment on market rumors or speculation."

In a separate written statement, TonenGeneral echoed Exxon's comments.

Japan's refiners cranked up output to meet a temporary spike in demand after the March 11 earthquake and tsunami, but the industry has been contracting for years amid the country's sluggish economy and as energy-efficient machinery -- including gasoline-electric hybrid autos -- becomes more prevalent.

The trend has also led to industry consolidation. In April 2010 JX Holdings Co. was created by integrating Nippon Oil Corp., Japan's largest refiner by capacity, and Nippon Mining Holdings Inc., the country's largest copper smelter, which also had oil-refining operations.

Credit: By William Sposato and Kenneth Maxwell

Subject: Petroleum industry; Equity stake

Location: Japan

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: TonenGeneral Sekiyu KK; NAICS: 324110

Classification: 9179: Asia & the Pacific; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.8

Publication year: 2012

Publication date: Jan 5, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 913688435

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/913688435?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Exxon Mobil to Unload Its Subsidiary in Japan

Author: Baylis, Paul; Frischkorn, Brad

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2012: n/a.

ProQuest document link

Abstract: None available.

Links: 360 Link to Full Text

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TOKYO--Exxon Mobil Corp. said it would restructure its operations in Japan, announcing plans to sell its subsidiary there for ¥300 billion ($3.91 billion) and to give up control of refiner TonenGeneral Sekiyu KK.

Under the deal, TonenGeneral will acquire 99% of the issued shares of the Exxon arm, Exxon Mobil Yugen Kaisha. Currently, the subsidiary is wholly owned by the U.S.-based company.

Exxon Mobil also will give up its controlling interest in TonenGeneral, Japan's second-largest refiner, maintaining a 22% voting share instead.

The companies aim to complete the deal by June.

Exxon Mobil said Sunday's deal will result in "a single, integrated downstream business better positioned to meet Japan's energy needs."

The U.S. company has been distancing itself from the refining-and marketing, or downstream, business globally. Western energy companies have been repositioning to adapt to a boom in exploration for hydrocarbons, such as shale gas and oil sands, once considered too difficult and expensive to extract, but which are now being exploited on an unprecedented scale from Australia to Canada.

Japanese refiners temporarily cranked up output to meet a spike in demand after last year's earthquake and tsunami. But with the economy sluggish for the past several years and more energy-efficient technologies, such as gasoline-electric hybrid cars, becoming more popular, the country's refining business has been contracting.

That has created overcapacity, leading to costly refinery closures. Idemitsu Kosan Co. in November said it would close a 120,000-barrel-a-day crude-distillation unit at its Tokuyama refinery in western Japan in March 2014.

Overcapacity also has triggered consolidation. In April 2010 JX Holdings Inc. was created by the merger of Nippon Oil Corp., Japan's largest refiner by capacity, and copper smelter Nippon Mining Holdings Inc., which had oil-refining operations.

Sunday's deal "definitely represents a real fork in the road for TonenGeneral," said CLSA equity strategist Nicholas Smith. "There are still too many refiners in Japan and too much capacity," he said.

"While the company's chief rival, JX Holdings, has performed an admirable turnaround in terms of boosting efficiency and trimming capacity, we have seen no such signs from TonenGeneral thus far," Mr. Smith said.

Tastunori Kawai of kabu.com Securities said TonenGeneral will lose managerial expertise and that its dividends could be at risk if the Exxon Mobil deal depletes the company's finances.The company will need hefty loans to finance the purchase. "This latest news will still probably surprise investors, and will be a short-term negative that might trigger another fall in TonenGeneral's common stock," he said.

In the longer term, the deal could help foster needed industry consolidation. Mr. Kawai said.

TonenGeneral said it had no plans to change its forecast for a 2011 dividend of ¥38 (50 cents) a share and that it expects to maintain the same payout for 2012.

TonenGeneral's common shares offer a dividend of nearly 3.3%. But that pales in comparison with the 41% loss the shares have taken by closing down in five of the past six years. TonenGeneral's shares are off 11% this year.

Kenneth Maxwell and William Sposato contributed to this article.

Write to Brad Frischkorn at bradford.frischkorn@dowjones.com

Credit: By Paul Baylis and Brad Frischkorn

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 30, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 918548152

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/918548152?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Corporate News: Exxon Mobil to Unload Its Subsidiary in Japan

Author: Baylis, Paul; Frischkorn, Brad

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Jan 2012: B.3. [Duplicate]

ProQuest document link

Abstract:

[...] with the economy sluggish for the past several years and more energy-efficient technologies, such as gasoline-electric hybrid cars, becoming more popular, the country's refining business has been contracting.

Links: 360 Link to Full Text

Full text:

TOKYO -- Exxon Mobil Corp. said it would restructure its operations in Japan, announcing plans to sell its subsidiary there for 300 billion yen ($3.91 billion) and to give up control of refiner TonenGeneral Sekiyu KK.

Under the deal, TonenGeneral will acquire 99% of the issued shares of the Exxon arm, Exxon Mobil Yugen Kaisha. Currently, the subsidiary is wholly owned by the U.S.-based company.

Exxon Mobil also will give up its controlling interest in TonenGeneral, Japan's second-largest refiner, maintaining a 22% voting share instead.

The companies aim to complete the deal by June.

Exxon Mobil said Sunday's deal will result in "a single, integrated downstream business better positioned to meet Japan's energy needs."

That has created overcapacity, leading to refinery closures. Idemitsu Kosan Co. in November said it would close a 120,000-barrel-a-day crude-distillation unit at its Tokuyama refinery in western Japan in March 2014.

Tastunori Kawai of kabu.com Securities said TonenGeneral will lose managerial expertise and that its dividends could be at risk if the Exxon Mobil deal depletes the company's finances.

TonenGeneral said it had no plans to change its forecast for a 2011 dividend of 38 yen (50 cents) a share and that it expects to maintain the same payout for 2012.

---

Kenneth Maxwell and William Sposato contributed to this article.

Credit: By Paul Baylis and Brad Frischkorn

Subject: Petroleum industry; Divestiture; Foreign subsidiaries; Petroleum refineries

Location: United States--US Japan

Company / organization: Name: Exxon Mobil Yugen Kaisha; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: TonenGeneral Sekiyu KK; NAICS: 324110

Classification: 2330: Acquisitions & mergers; 8510: Petroleum industry; 9179: Asia & the Pacific

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2012

Publication date: Jan 30, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 918568775

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/918568775?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Exxon Keeps Foot on the Gas Pedal

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Jan 2012: n/a.

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Abstract:

Bill Herbert, co-head of research at energy investment bank Simmons & Co. International, said it would take more than just a drop in natural-gas drilling to reduce the surplus of the fuel, but also a cut in oil drilling since oil wells often produce large amounts of natural gas at the same time.

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Exxon Mobil Corp., the largest natural-gas producer in the U.S., said it has no intention of curtailing gas production even as analysts predict prices for the fuel could remain at a historically low level through next year.

The oil-and-gas giant, which reported a 1.6% rise in fourth-quarter profit Tuesday, said it has no plans to cut back on the number of drilling rigs active in North America. Its fourth-quarter U.S. gas production was up 3.5%, while its gas production globally was down 6.6%.

A growing percentage of the company's roughly 70 land-based drilling rigs in the U.S. are being shifted to explore underground formations believed to hold large quantities of liquid fuels that can fetch higher prices than gas, such as ethane, propane and butane. But these areas also contain gas, meaning Exxon will continue to contribute to the glut of the fuel in the U.S.

Exxon said it believed the fuel would continue to attract new consumers. "We remain bullish on the demand side of natural gas as an energy source in the U.S.," said David Rosenthal, vice president of investor relations.

Exxon's decision to continue producing natural gas is in stark contrast to smaller competitors, such as Chesapeake Energy Corp., which said last week it would slash its U.S. natural-gas drilling in half in response to low prices. And it helped send natural-gas futures prices down 21 cents, or 8%, to $2.503 per million British thermal units Tuesday in trading on the New York Mercantile Exchange.

Exxon, the world's largest publicly traded energy company, also reported a profit of $9.4 billion, or $1.97 a share, up from $9.25 billion, or $1.85 a share, in the fourth quarter of 2010. Revenue increased 16% to $121.61 billion.

The results narrowly beat analyst expectations of $1.96 a share, helped by stronger oil prices and higher-than-expected asset sales. Oil prices were over $100 a barrel in the fourth quarter.

Shares of Exxon fell 2.1% to $83.74 in New York Stock Exchange trading, largely in reaction to lower-than-expected global production figures. Quarterly output fell 9% to 4.53 million barrels of oil equivalent per day, mainly because of declining oil-field productivity.

U.S. natural-gas prices declined steeply over the past several years due to a boom in gas production. The successful marriage of two techniques--horizontal drilling and hydraulic fracturing, where millions of gallons of water, sand and chemicals are pumped at high pressure into formations--allowed companies to tap previously inaccessible oil and gas deposits.

The low prices have led producers to cut back on gas drilling. From 1,450 rigs drilling for gas in January 2008, the number has fallen to 777 rigs as of last week, according to Baker Hughes Inc., and is expected to continue to drop. Over that same time period the number of rigs drilling for oil grew from 316 to 1,225.

"The quickest road-to-Rome, however, would be a sharp correction in oil prices. This would result in very sharp activity reductions in oil as well as gas directed activity," he said in an email.

Exxon's U.S. natural-gas production doubled in 2010 when it acquired XTO Energy for $31 billion. Mr. Rosenthal said the company has driven down operating costs on XTO drilling projects in the 18 months since the acquisition.

The company hopes to export its know-how to overseas unconventional oil and gas fields; it said it drilled two wells into a Polish shale in the fourth quarter, although neither had commercial quantities of natural gas.

Exxon sold $6.9 billion in assets in the quarter, far more than the $1 billion to $1.7 billion reported in recent quarters. Mr. Rosenthal said the figure didn't mark a change in the company's divestment plans but more likely represented the timing of deals which can take many months or even years to come together.

Isabel Ordonez contributed to this article.

Credit: By Tom Fowler

Subject: Natural gas; Petroleum industry; Corporate profits

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jan 31, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 918773316

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/918773316?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon to Keep Its Foot on Gas Pedal; Energy Giant Won't Curb Production Despite Natural-Gas Slump; Strong Crude Prices Bolster Quarterly Earnings

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Feb 2012: n/a.

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The results narrowly beat analyst expectations of $1.96 a share, helped by stronger oil prices and higher-than-expected asset sales. Oil prices were over $100 a barrel in the fourth quarter.

"The quickest road-to-Rome, however, would be a sharp correction in oil prices. This would result in very sharp activity reductions in oil as well as gas directed activity," he said in an email.

Isabel Ordonez contributed to this article.

Credit: By Tom Fowler

Subject: Natural gas; Petroleum industry; Corporate profits

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Feb 1, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 918831496

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/918831496?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon to Keep Foot on Gas Pedal

Author: Fowler, Tom

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Feb 2012: B.1.

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Bill Herbert, co-head of research at energy investment bank Simmons & Co. International, said it would take more than just a drop in natural-gas drilling to reduce the surplus, but also a cut in oil drilling since oil wells often produce large amounts of natural gas at the same time.

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Exxon, the world's largest publicly traded energy company, also reported a profit of $9.4 billion, or $1.97 a share, up from $9.25 billion, or $1.85 a share, a year earlier. Revenue increased 16% to $121.61 billion.

The results beat analyst expectations of $1.96 a share, helped by stronger oil prices and higher-than-expected asset sales. Oil prices were over $100 a barrel in the fourth quarter.

U.S. natural-gas prices declined steeply over the past several years due to a boom in gas production. The successful marriage of two techniques -- horizontal drilling and hydraulic fracturing, where millions of gallons of water, sand and chemicals are pumped at high pressure into formations -- allowed companies to tap previously inaccessible oil and gas.

"The quickest road-to-Rome, however, would be a sharp correction in oil prices. This would result in very sharp activity reductions in oil as well as gas directed activity," he said.

Exxon's U.S. natural-gas production doubled in 2010 when it acquired XTO Energy.

Exxon sold $6.9 billion in assets in the quarter, far more than the $1 billion to $1.7 billion reported in recent quarters. Mr. Rosenthal said the figure didn't mark a change in divestment plans but more likely represented the timing of deals, which can take many months or even years to come together.

---

Isabel Ordonez contributed to this article.

Credit: By Tom Fowler

Subject: Natural gas; Petroleum industry; Corporate profits; Petroleum production

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 9180: International; 9110: Company specific; 8510: Petroleum industry; 5310: Production planning & control

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2012

Publication date: Feb 1, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 918908291

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/918908291?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Iraq Blocks Exxon License Bid

Author: Hassan Hafidh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2012: n/a.

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The new bid round, scheduled for May, is expected to add some 10 billion barrels of crude oil and some 29 trillion cubic feet of gas to Iraq's reserves.

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U.S. energy giant Exxon Mobil Corp. will be barred from Iraq's fourth oil- and gas-licensing auction because of the deals it struck with the country's semi-autonomous Kurdistan region, a spokesman for Iraqi Deputy Prime Minister for Energy Hussein al-Shahristani said Monday.

The move comes as Iraq's central government struggles to assert its authority over energy deals struck within its borders amid a continued lack of legislation for the sector.

The Iraqi government considers as invalid any deals signed with the Kurdistan Regional Government, or KRG, which in turn states that all and any deals it has signed comply with the country's new constitution.

"The Iraqi government has decided that Exxon won't be allowed to participate in the next oil- and gas-bidding round," spokesman Faisal Abdullah told The Wall Street Journal.

Iraq is planning to auction 12 promising exploration blocks, seven of which are believed to contain natural gas, and five thought to contain crude.

The new bid round, scheduled for May, is expected to add some 10 billion barrels of crude oil and some 29 trillion cubic feet of gas to Iraq's reserves.

However, it has already been delayed twice amid arguments on whether the contracts offered should be of the production-sharing type wanted by the explorers or the fixed-fee service contracts wanted by the government.

For the next licensing auction, Baghdad has refused to offer industry-standard production-sharing contracts, where the oil company owns a portion of the oil in the ground and can profit from its sale.

It is instead insisting on service contracts that pay companies a fixed fee for the amount of oil they produce.

The fixed-fee service contracts have worked for the redevelopment of existing oil fields in Iraq--albeit with very slim margins for the companies involved--but are unappealing for many companies facing the gamble of oil exploration, said KBC Energy Economics analyst Samuel Ciszuk.

"You don't know what you're going to find," said Mr. Ciszuk. "You have all these uncertainties, the most rigid contract framework...and delays building up because of slow state decision-making."

Mr. al-Shahristani has previously said Exxon would have to choose between its deal to explore six areas in Kurdistan and its central-government contract to develop the 370,000 barrel-a-day West Qurna Phase 1, Iraq's second-biggest field. It has proven reserves of more than 8.7 billion barrels.

"We are still waiting for Exxon to answer our letters in which we warned that it has to choose between contracts in Kurdistan and those in southern Iraq," the spokesman said, adding that depending on Exxon's reply the government would make a decision about its existing contract in the south.

An Exxon media officer in the U.S. declined to comment.

In December, Iraqi Prime Minister Nouri al-Maliki met with senior Exxon executives during a visit to the U.S. and said afterward that the Irving, Texas, company had promised to reconsider its dealings with the KRG.

The KRG has signed nearly 50 oil and gas deals with international oil companies, mostly second-tier or wildcat explorers. The KRG was hopeful that Exxon's presence would ease the passage of other majors, such as Total SA, which is active in Iraq.

Some of the blocks in the Exxon-KRG deal are in a hotly contested oil-rich territory claimed by both the central government and the KRG, stretching from the Iranian border to the east and to the Syrian border in the northwest.

Baghdad has already blacklisted companies that maintain deals with the Kurds, excluding them from working elsewhere in Iraq. Among those is New York-based Hess Corp., which was barred last year from competing in the fourth energy auction.

However, Adnan Al Janabi, chairman of the Oil and Energy Committee in the Iraqi Council of Representatives, last week said that the Oil Ministry doesn't have the legal authority to blacklist Exxon over its Kurdistan contracts.

Iraq--holder of the world's third-largest oil reserves, estimated at 143 billion barrels--auctioned and awarded some 11 oil fields to international oil firms in 2009 and 2010.

James Herron in London contributed to this article.

Credit: By Hassan Hafidh

Subject: Petroleum industry; Iraq War-2003; Natural gas; Prime ministers; Energy economics

Location: Iraq United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 20 12

Publication date: Feb 13, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 921170828

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/921170828?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Asks Iraq for More Time on Kurdish Deal

Author: Hassan Hafidh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Mar 2012: n/a.

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The KRG has signed nearly 50 oil and gas deals with international oil companies, mostly second-tier or wildcat explorers, and was hopeful that Exxon's presence would entice other majors.

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Exxon Mobil Corp. has asked the Iraqi central government to give it "few more days" to decide whether or not it will cancel an exploration deal with Iraqi Kurdistan, a deal which Baghdad strongly opposes, a spokesman for Iraq's Deputy Prime Minister for Energy Hussein al-Shahristani said Tuesday.

Iraq has asked the U.S. giant to choose between its deal with the semi-autonomous northern Iraqi region and its central-government contract to develop the 370,000 barrels-a-day West Qurna Phase 1. The impasse means Exxon has also been barred from Iraq's fourth oil-and-gas licensing auction, scheduled for May.

The Iraqi government considers as invalid any deals signed with the Kurdistan Regional Government, or KRG, which in turn insists that such deals comply with the country's constitution. The KRG has signed nearly 50 oil-and-gas deals with international oil companies, mostly second-tier or wildcat explorers, and was hopeful that Exxon's presence would entice other majors.

"[Exxon] has asked the Deputy Prime Minister to give it some more days in order to decide its stance on the contract it signed with Kurdistan," Faisal Abdullah, a spokesman for the Iraqi Oil Ministry, told Dow Jones Newswires. Mr. Abdullah said Exxon's request was submitted last week by a company representative who met with Mr. Shahristani in Baghdad.

The Iraqi government has sent Exxon Mobil three letters asking it to choose between its deal to explore six areas in Kurdistan, and its contract to develop West Qurna Phase 1, which has proven reserves of 8.7 billion barrels.

Mr. Abdullah said the central government is waiting for Exxon's response to its letters, after which Bagdhad will make a decision on the matter.

Last month, Iraq barred Exxon from bidding in its fourth licensing auction in which 12 promising exploration blocks are up for grabs. Exxon has also been excluded from a contract worth up to $10 billion to build a joint water-injection project in southern Iraq.

In December, Iraq's Prime Minister Nouri al-Maliki met with senior Exxon executives during a visit to the U.S., and said afterward that the Irving, Texas-based company had promised to reconsider its dealings with the KRG.

Some of the blocks in the Exxon-KRG deal are in a hotly contested oil-rich territory claimed by both the central government and the KRG, stretching from the Iranian border in the east to the Syrian border in the northwest.

Baghdad has already blacklisted companies that maintain deals with the Kurds, excluding them from working elsewhere in Iraq. Among those is New York, N.Y.-based Hess Corp., which has also been barred from competing in the fourth energy auction.

Tuesday's comments by the Iraqi government led to a large sell-off in shares of Gulf Keystone Petroleum Ltd., which is active in Iraqi Kurdistan. The London-listed explorer has been seen as a potential takeover target following Exxon Mobil's agreement with the KRG, and analysts said the sharp fall in its share price was a sign that some speculative takeover premium was leaking away.

Isabel Ordonez in Houston and James Herron in London contributed to this article.

Credit: By Hassan Hafidh

Subject: Petroleum industry; Prime ministers; Iraq War-2003

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Mar 6, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 926413860

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/926413860?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Rips U.S. Push on Fracking Oversight; CEO Says Regulators' Efforts Threaten Domestic Output

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2012: n/a.

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Federal efforts to expand oversight of oil and gas drilling are threatening to derail development of U.S. energy without necessarily improving safety, Exxon Mobil Corp. Chief Executive Rex Tillerson said Thursday.

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The push by the Environmental Protection Agency and a handful of other agencies to have a say in the controversial drilling technique known as hydraulic fracturing, or "fracking," has had little impact so far on energy giant Exxon, Mr. Tillerson said in an interview following the company's analysts meeting in New York on Thursday.

But the federal effort is hampering state-level regulators, who are primarily responsible for overseeing oil and gas operations and in some cases may be putting off updating rules for fear that they will be overruled by federal laws in the coming years, he said.

An EPA spokesman couldn't be reached to comment.

"Our regulatory process has become so complicated by so many duplicative agencies, by so many mandates from Congress, that now it is become a way to stop things from happening," Mr. Tillerson said. "There are a 1,000 ways you can be told 'no' in this country. So people who want to stop activity have a willing partner in the regulatory process and court system."

It is a message Mr. Tillerson is expected to repeat Friday morning when he delivers a keynote address at the CERA Week conference in Houston, an annual event that draws thousands of energy-industry officials.

During Thursday's meeting, one of the few events during the year where Mr. Tillerson fields questions directly from analysts and reporters, Exxon also said it will maintain its record capital spending levels of about $37 billion per year through 2016, for a total of $185 billion. The estimate is significantly higher than the range the company provided last year of $33 billion to $37 billion a year through 2015. Exxon, based in Irving, Texas, is the largest gas producer in the U.S. and the world's largest publicly traded oil company.

The bulk of Exxon's investment is going to be spent on massive capital projects world-wide, the company said, with a total of 21 major oil and gas projects beginning production between 2012 and 2014. In the meantime, however, the company said its 2012 production would dip by about 3%.

The size of the decline came as a surprise to a number of analysts, including Simmons & Co.'s Guy Baber, who said he was forecasting a 2% drop.

"This is just another example of the industry needing to spend far more just to generate the same, or lower, production output," Mr. Baber said in an email.

Despite weak natural-gas prices, which have reached their lowest level in a decade amid a glut of the fuel source, Exxon says it is making money on its natural-gas operations and doesn't need to dial back on gas drilling, as many of its competitors have done.

Mr. Tillerson said the company continued to consider acquiring individual assets, such as acreage in particular exploration and production areas, as opposed to entire companies.

"But you never rule out anything," he said.

Write to Tom Fowler at tom.fowler@wsj.com

Credit: By Tom Fowler

Subject: Petroleum industry; Hydraulic fracturing; Capital expenditures; Natural gas

Location: United States--US

People: Tillerson, Rex W

Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Mar 8, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 926802089

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/926802089?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Rips U.S. Push on Fracking Oversight; CEO Says Regulators' Efforts Threaten Domestic Output

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2012: n/a.

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A White House spokesman said that "the President has been clear about the importance of domestic oil and gas production, including the central role safe and responsible natural gas development will play in our energy future." He added that the "administration is in the process of developing sensible standards to protect air and water quality, based on important input from stakeholders including industry."

The size of the decline came as a surprise to a number of analysts, including Simmons & Co.'s Guy Baber, who said he was forecasting a 2% drop.

"This is just another example of the industry needing to spend far more just to generate the same, or lower, production output," Mr. Baber said in an email.

Mr. Tillerson said the company continued to consider acquiring individual assets, such as acreage in particular exploration and production areas, as opposed to entire companies.

"But you never rule out anything," he said.

Write to Tom Fowler at tom.fowler@wsj.com

Credit: By Tom Fowler

Subject: Petroleum industry; Hydraulic fracturing; Capital expenditures; Natural gas

Location: United States--US

People: Tillerson, Rex W

Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Mar 9, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 926830953

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/926830953?accountid=7117

Last updated: 2017-11-18

Database: The Wall Street Journal

Corporate News: Exxon Rips U.S. Push on Fracking Oversight

Author: Fowler, Tom

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Mar 2012: B.3.

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But the federal effort is hampering state-level regulators, who are primarily responsible for overseeing oil and gas operations and in some cases may be putting off updating rules for fear they will be overruled by federal laws in coming years, he said.

The size of the decline came as a surprise to a number of analysts, including Simmons & Co.'s Guy Baber, who said he was forecasting a 2% drop.

"This is just another example of the industry needing to spend far more just to generate the same, or lower, production output," Mr. Baber said in an email.

Mr. Tillerson said the company continued to consider acquiring individual assets, such as acreage in particular exploration and production areas, as opposed to entire companies.

"But you never rule out anything," he said.

Credit: By Tom Fowler

Subject: Petroleum industry; Hydraulic fracturing; Federal regulation

Location: United States--US

People: Tillerson, Rex W

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 4310: Regulation; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2012

Publication date: Mar 9, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 926867634

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Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon to Seek Unified Fracking-Disclosure Rules

Author: Ordonez, Isabel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2012: n/a.

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Exxon and other large international oil companies have recently acquired large shale-land positions in countries such as Poland that they believe could have similar potential as the U.S. But several European countries have recently banned hydraulic fracturing due to environmental concerns.

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HOUSTON--Exxon Mobil Corp. will ask energy-industry partners and governments in Europe to have the same level of disclosure on hydraulic fracturing achieved in the U.S., Chief Executive Rex Tillerson said Friday.

Exxon Mobil, the world's largest publicly traded oil company, will also work to shed light on concerns about hydraulic fracturing as a cause of irregular seismic activity, he said.

"We will be calling on our government and industry partners to implement in Europe the same level of openness and accountability that FracFocus has delivered in the United States," Mr. Tillerson said at a speech delivered at the IHS CERA conference here. "Unconventional gas development holds tremendous promise in many places in Europe. But we want policy makers and the public to be confident in these proven technologies."

FracFocus.org is an industry-supported website where companies can register and disclose the chemicals they use in hydraulic fracturing, or "fracking." The drilling technique involves sending pressurized water and other materials deep underground to release oil and natural gas trapped within rock formations. Hydraulic fracturing has allowed companies to tap vast new reserves of oil and natural gas, but critics have said the process harms the environment.

"An initiative similar to FracFocus in Europe will allow citizens and communities to begin their consideration of this technology with a strong factual foundation," Mr. Tillerson said. "We believe that will lead to open and fruitful discussion about the risks we manage and the benefits we foresee for shale and tight-sand gas-and-oil development in Europe."

Irving, Texas-based Exxon will also help solve concerns about hydraulic fracturing as a cause of earthquakes, Mr. Tillerson said. "We will support the use of sound science to inform reasonable regulatory frameworks," he said.

But although Exxon supports disclosure and smart regulations, the company said the involvement of the federal government in hydraulic fracturing, which has been regulated by local governments, poses a threat to shale development in the U.S.

"Political considerations based on two- and four-year electoral cycles are a significant hindrance to long-term planning and investment, which can affect jobs and competitiveness for decades," Mr. Tillerson said. "This type of dysfunctional regulation is holding back the American economic recovery, growth and global competitiveness."

Shale-gas development on a global scale is still nascent, but the industry it confident that the resources are "significant" enough that, if developed, they could change the world's energy landscape, Mr.Tillerson said. Lack of infrastructure and the massive number of skilled people needed to develop shale resources are the major hurdles, he added.

Separately, Exxon expects world-wide deep-water production to double by 2040, Mr. Tillerson said.

Om Thursday in New York, Mr. Tillerson said his company remains committed to working in both Kurdistan and southern Iraq, despite pressure from the Iraqi central government to have the company cancel its work in autonomous Kurdistan.

"We're committed to both of those developments and indicated to the government our intention to continue our commitments in both West Qurna (southern Iraq) and Kurdistan," Mr. Tillerson said Thursday in a press conference at the New York Stock Exchange, where the company was holding its annual analyst meeting.

"The country has a lot of issues that it is dealing with that have yet to be resolved. We want to be helpful in that regard and not be a distraction to that, so beyond that I don't think we'll be making any further comments," Mr. Tillerson said.

Tom Fowler contributed to this article.

Write to Isabel Ordonez at Isabel.ordonez@dowjones.com

Credit: By Isabel Ordonez

Subject: Hydraulic fracturing; Petroleum industry; Hydraulics; Natural gas

Location: United States--US

People: Tillerson, Rex W

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Mar 9, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 926949400

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/926949400?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Chevron Battles Exxon for Big Oil's Crown

Author: Denning, Liam

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2012: n/a.

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[...] Exxon's stock trades at 9.8 times future earnings, compared with Chevron's 7.7 times. Exxon's fell behind in late 2009, coinciding with the announcement of its $41 billion purchase of U.S. natural-gas producer XTO Energy. [...] gas prices have slumped, diluting Exxon's profits.

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Big Oil's moniker suggests it is a monolith. But the majors are increasingly differentiated, as underlined by recent strategy show-and-tells. ConocoPhillips, for example, will soon split in two, reversing the consolidation that created it. That will leave Chevron and Exxon Mobil as the two U.S. giants.

Exxon has long led in every way. Its market capitalization, $394 billion, is almost double Chevron's. Exxon produced 67% more oil and gas last year. It also earned more profit per barrel of oil equivalent produced than Chevron in eight of the past 12 years, according to consultancy IHS Herold. Its annual return on capital was on average 4.7 percentage points higher than Chevron's, according to Standard & Poor'sCapital IQ. Consequently, Exxon's stock trades at 9.8 times future earnings, compared with Chevron's 7.7 times.

But the performance gap is closing or, in some cases, has closed. Since late 2009, Chevron has earned higher net income per barrel. It has also discovered more oil and gas as a share of output, excluding purchases and estimate revisions, on a one- and three-year view. And it is fast closing the gap on return on capital.

Total shareholder return, incorporating dividends, over the past 10 years tells the story: Chevron's is 237%; Exxon's is 153%. Exxon's fell behind in late 2009, coinciding with the announcement of its $41 billion purchase of U.S. natural-gas producer XTO Energy. Since then, gas prices have slumped, diluting Exxon's profits.

Exxon says that on a long-term view, it has staked out an enviable position in unconventional resources like shale oil and gas. Perhaps, but profitability will likely suffer for some time. By 2015, about 18% of Exxon's output will come from unconventional resources in North America, compared with less than 4% at Chevron, according to Goldman Sachs.

Chevron's relatively greater leverage to global oil prices, rather than U.S. gas, bolstered the company's quarterly update last week. It could also help Chevron finally close the return-on-capital gap altogether.

Moreover, while Chevron hasn't done an XTO-sized deal, it has a good portfolio of unconventional prospects. With gas prices so low, the best prospects hold oil or "wet gas," containing a bigger proportion of higher value natural-gas liquids. Credit Suisse analyst Ed Westlake estimates Chevron's "liquids rich" land portfolio in North America at almost two million net acres and significantly higher than Exxon's.

Raoul LeBlanc, head of global gas at consultancy PFC Energy, says "Chevron in general has more options" when it comes to shifting investment towards liquids in the onshore U.S. He points to a drop in the proportion of wells drilled and operated by Chevron producing "dry" gas to 30% in 2011, down from half for much of the past decade. In contrast, Exxon's share is about 80%, according to PFC's database.

Exxon maintains that it is "well-positioned" and is shifting its considerable resources towards liquids-rich prospects.

At this point, Exxon is essentially in the process of gaining experience in U.S. unconventional resources--a big reason for buying XTO was to bring its expertise in house. The company says it has been "very successful" in retaining XTO's employees.

U.S. onshore development represents a new kind of risk for the majors, who have traditionally focused on so-called megaprojects such as Exxon's Qatari gas operations. But the U.S. shale boom was launched by smaller, more nimble, independent companies. Their success required different skills and, according to Mr. LeBlanc, a "decentralized" approach less suited to the majors' established corporate processes. Shale fields, requiring multiple wells and much trial and error, can be thought of as many small, linked projects rather than a traditional megaproject.

Chevron faces its own challenges in the next few years as it tries to develop Australia's enormous Gorgon liquefied natural gas project on time and on budget. But this, at least, is more traditional territory.

Given Exxon's formidable track record, it is a brave soul who would bet against it over the long term. But Chevron, particularly over the next few years, looks the better bet. The discount to its bigger rival looks ever less defensible.

Liam Denning

Write to Liam Denning at

Credit: By Liam Denning

Subject: Petroleum industry; Energy economics; Natural gas

Location: United States--US

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 15, 2012

column: Heard on the Street

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1000360598

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1000360598?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Sets Russian Projects

Author: Fowler, Tom; González, Ángel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Apr 2012: n/a.

ProQuest document link

Abstract:

Exxon Mobil Corp. and Russian oil firm OAO Rosneft unveiled details about their partnership, including plans to form joint ventures in the Kara Sea and Black Sea and agreements to give Rosneft subsidiaries ownership stakes in three Exxon projects in North America.

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Exxon Mobil Corp. and Russian oil firm OAO Rosneft on Monday unveiled new details of a partnership that will tap oil and gas reserves in the Arctic Ocean and in the Black Sea and will provide a foothold for Rosneft in the U.S. and Canada.

The deal, originally disclosed in August, signaled a significant win for Exxon Mobil over a range of competitors lining up for access to some of the last major untapped oil and gas reserves in the world.

The proposed exploration projects in Russia between Exxon Mobil and Rosneft are in the Kara Sea, north of the Arctic Circle, and in the Black Sea. The companies initially are expected to spend about $3.2 billion developing the two projects.

The North American projects, which were revealed for the first time on Monday, have Rosneft subsidiary Neftegaz Holding America Ltd. gaining a 30% stake in Exxon's La Escalera Ranch project in West Texas, where the oil firm is employing the most advanced exploration techniques. Three exploration wells have been drilled so far in the project, which is expected to hold oil and "wet gas," a mix of natural gas and liquid fuels such as ethane, propane and butane.

Neftegaz also will have the right to buy a 30% stake in 20 still to be determined drilling areas held by Exxon in the western part of the Gulf of Mexico; while another Neftegaz unit will hold a 30% stake in the Cardium formation in Alberta, Canada, where the Russian company hopes to learn more about drilling in unconventional oil fields.

The venture is the first time a Russian government-controlled energy firm has taken a significant stake in an American energy project, said Lysle Brinker, director of equity research at the research firm IHS Herold.

"If anyone could pull it off politically it would be have to be the national oil company of the U.S., which is essentially what Exxon Mobil is," Mr. Brinker said. Exxon is the largest publicly traded oil company in the world by market value.

Other state-owned oil companies have invested in U.S. oil and gas projects in the past, including China Petrochemical Corp., or Sinopec, which announced a $2.5 billion deal with Devon Energy Corp. earlier this year in which it received a one-third stake in five emerging oil and gas fields.

Exxon and Rosneft said they began exploration activity in the Black Sea in September and that their seismic program is 70% complete. It is expected to be completed in the second quarter and exploratory drilling is scheduled to start in 2014.

The companies have started environmental assessments in the Kara Sea in anticipation of a potential exploration well in 2014.

Rosneft and Exxon also agreed to jointly develop technologies to allow drilling in difficult to tap oil fields in Western Siberia, positioning the companies for future joint ventures in Russia.

Exxon shares rose 1.3%, or $1.06, to $84.01 in 4 p.m. trading Monday on the New York Stock Exchange.

Write to Ángel González at

Credit: By Tom Fowler and Ángel González

Subject: Petroleum industry; Joint ventures; Equity stake

Location: Kara Sea Black Sea North America

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: OAO Rosneft; NAICS: 324110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 16, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1000437052

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1000437052?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Sets Russian Projects

Author: Fowler, Tom; Gonzalez, Angel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Apr 2012: B.2.

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Abstract:

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The companies have started environmental assessments in the Kara Sea in anticipation of a potential exploration well in 2014.

Rosneft and Exxon also agreed to jointly develop technologies to allow drilling in difficult to tap oil fields in Western Siberia, positioning the companies for future joint ventures in Russia.

Exxon shares rose 1.3%, or $1.06, to $84.01 in 4 p.m. trading Monday on the New York Stock Exchange.

Credit: By Tom Fowler and Angel Gonzalez

Subject: Petroleum industry; Partnerships; Oil exploration

Location: Black Sea United States--US Kara Sea Arctic Ocean

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: OAO Rosneft; NAICS: 324110

Classification: 9190: United States; 8510: Petroleum industry

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2012

Publication date: Apr 17, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1000893976

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1000893976?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Iraq Bars Exxon From Energy Auction

Author: Hassan Hafidh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2012: n/a.

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Abstract:

Earlier this month the KRG suspended the export of some 90,000 barrels of oil a day through the Baghdad export pipeline over payment issues, while Iraq's deputy prime minister, Hussein al-Shahristani, accused the Kurdish authorities of allowing the smuggling $6.5 billion worth of oil and oil products via Iran for sale in Iran, Afghanistan and Pakistan in 2010 and 2011, something the Kurds denied.

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Iraq Thursday officially barred U.S. energy giant Exxon Mobil Corp. from taking part in the country's fourth oil- and gas-licensing auction, scheduled for May, because of deals it struck with the semiautonomous Kurdistan region.

Iraq has asked the Texas-based company to choose between its deals with the Kurdistan Regional Government in northern Iraq and its central-government contract to develop the giant West Qurna-1 oil field n the south. Exxon last month told the Baghdad government it froze its deals with the KRG, but the government wants the deals completely canceled.

"We want more action from Exxon," said Sabah Abdul Kadhim, deputy of the Iraqi Oil Ministry's petroleum contracts. "We want Exxon to cancel its Kurdistan deals."

Mr. Abdul Kadhim warned that Exxon could face further action if it didn't terminate its deals with Kurdistan. He didn't explain what action would be taken, but he is thought to be referring to West Qurna-1.

"So far Exxon's West Qurna-1 contract is valid," Mr. Abdul Kadhim said, however.

An Exxon media officer in the U.S. declined to comment.

Exxon's deals with the KRG have angered Baghdad, which maintains that it must approve all deals signed within Iraq. Some of the Kurdistan blocks are in a hotly contested oil-rich territory claimed by both the central government and the KRG. The territory stretches from the Iranian border in the east to the Syrian border in the northwest.

Analysts also said Iraq was angry with Exxon's stance. While Exxon informed Baghdad that it has frozen its deals with Kurdistan, its chief executive, Rex Tillerson, recently told KRG President Massoud Barzani that it will continue its operations in Kurdistan.

Tension between Baghdad and Kurdistan has escalated over the last few weeks. Earlier this month the KRG suspended the export of some 90,000 barrels of oil a day through the Baghdad export pipeline over payment issues, while Iraq's deputy prime minister, Hussein al-Shahristani, accused the Kurdish authorities of allowing the smuggling $6.5 billion worth of oil and oil products via Iran for sale in Iran, Afghanistan and Pakistan in 2010 and 2011, something the Kurds denied.

At West Qurna-1, Exxon and minority partner Royal Dutch Shell PLC have raised output to nearly 400,000 barrels a day from 244,000 barrels a day when the pair signed up for the project in early 2010. The contract targets eventual output of 2.825 million barrels a day.

The venture will get some $1.90 for each extra barrel of oil produced above the 244,000 barrels a day baseline. Were the contract to be terminated, Exxon and Shell would lose some $106.7 million a year at current output rates and a potential $1.8 billion a year when the production plateau is reached in 2017.

In May Iraq plans to auction 12 promising exploration blocks, seven of which are believed to contain natural gas, and five thought to contain crude. The twice-delayed bidding round is expected to add some 10 billion barrels of oil and some 29 trillion cubic feet of gas to Iraq's reserves.

Tom Fowler contributed to this article.

Write to Hassan Hafidh at

Credit: By Hassan Hafidh

Subject: Petroleum industry; Iraq War-2003; Oil sands; Natural gas

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 19, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1002596203

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1002596203?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Russia to Embrace Energy Partners --- Fuel Czar Says More Foreign-Investment Pacts May Follow Exxon Deal to Help Tap Resources

Author: Gonzalez, Angel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Apr 2012: B.4.

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Russia's latest bid for foreign participation is an indication the country, which jostles with Saudi Arabia for the rank of top global oil producer, is aware of the challenges it faces maintaining production as conventional energy sources decline.

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Igor Sechin, Russia's deputy prime minister and a close ally of President-elect Vladimir Putin, estimated that by 2030, up to 40% of Russia's oil output would stem from untapped sources in the Arctic waters and the Black Sea -- which it needs foreign assistance to unlock.

A joint venture between state-run Russian giant OAO Rosneft and Exxon could eventually recover about 90 billion barrels of oil equivalent in oil and gas in those areas, the partners estimate. But first they will have to find oil in hostile climates and then set up airports, pipelines and dozens of iceberg-resistant offshore platforms. The deal, finalized earlier this week, gives Exxon a one-third stake in production companies in the Black Sea and the Arctic offshore. It also gives Rosneft a stake in three of Exxon's North American projects.

"It's a long-term collaboration, which would be extended for decades -- 30, 40 or 50 years," Mr. Sechin, 52 years old, said in an interview Wednesday during his first visit to the U.S. "We'll give jobs to hundreds of thousands of people," both in the U.S. and Russia, he said.

Mr. Sechin said he expects similar deals with other firms will occur in the near future. The Exxon deal was "quite special, but there will be others," he said.

Exxon's landmark deal with Russia is a boon for the world's largest publicly traded oil company, which needs to replace the vast amounts of crude it extracts from the ground every year with new reserves.

The "flagship" Exxon-Rosneft effort could generate investments of $200 billion to $300 billion by the partners over several decades, Mr. Sechin said.

To reduce risk, the Russian government is softening the taxes that will be imposed on such projects. Exxon CEO Rex Tillerson personally asked Mr. Putin for more favorable terms, Mr. Sechin added.

Mr. Sechin's visit, which included a presentation to U.S. analysts on Wednesday in New York and a visit to Exxon facilities in Houston, comes after a decade of difficulties for foreign investors seeking a piece of Russia's massive oil wealth.

Last year an Arctic oil alliance between Rosneft and BP PLC collapsed amid a conflict with BP's other local partners. Last month, a final decision on the giant Shtokman liquefied-natural-gas project, in which France's Total SA, Statoil ASA of Norway and Russia's state-run OAO Gazprom are participating, was delayed.

Amy Myers Jaffe, an energy specialist at Rice University's Baker Institute, said Russia's latest overture is an attempt to compete for scarce global capital that might otherwise go to energy projects in Canada, Australia or Africa.

But because Russia's nationalistic streak remains unchanged, she said, "ultimately there are a lot of unknowns" for companies following Exxon's lead there.

The multilingual Mr. Sechinsaid he didn't know what his role would be in Mr. Putin's new government, set to take office in May. "Man proposes, and God disposes," he said in Spanish.

Credit: By Angel Gonzalez

Subject: Petroleum industry; Joint ventures; Offshore oil exploration & development

Location: Black Sea United States--US Russia

People: Putin, Vladimir

Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 8510: Petroleum industry; 9180: International

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.4

Publication year: 2012

Publication date: Apr 21, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1008552752

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1008552752?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Russia to Embrace Energy Partners; Fuel Czar Says More Foreign-Investment Pacts May Follow Exxon Deal to Help Tap Resources

Author: González, Ángel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2012: n/a.

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Abstract: None available.

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NEW YORK--Russia is counting on foreign investment spearheaded by U.S. oil behemoth Exxon Mobil Corp. to defend its status as an oil superpower, the nation's energy czar said in an interview with The Wall Street Journal.

A joint venture between state-run Russian giant OAO Rosneft and Exxon could eventually recover about 90 billion barrels of oil equivalent in oil and gas in those areas, the partners estimate. But first they will have to find oil in hostile climates and then set up massive airports, pipelines and dozens of iceberg-resistant offshore platforms. The deal, finalized earlier this week, gives Exxon a one-third stake in production companies in the Black Sea and the Arctic offshore. It also gives Rosneft a stake in three of Exxon's North American projects.

"It's a long-term collaboration, which would be extended for decades--30, 40 or 50 years," Mr. Sechin, 52 years old, said in an interview Wednesday during his first visit to the U.S. "We'll give jobs to hundreds of thousands of people," both in the U.S. and Russia, he said.

Mr. Sechin said he expects similar deals with other firms will occur in the near future. The Exxon deal was "quite special, but there will be others," he said.

The "flagship" Exxon-Rosneft effort could generate investments of $200 billion to $300 billion by the partners over several decades, Mr. Sechin said.

To reduce risk, the Russian government is softening the taxes that will be imposed on such projects. Exxon CEO Rex Tillerson, who was based in Russia earlier in his career, personally asked Mr. Putin for more favorable terms, Mr. Sechin added.

But because Russia's nationalistic streak remains unchanged, she said, "ultimately there are a lot of unknowns" for oil companies following Exxon's lead there.

The multilingual Mr. Sechinsaid he didn't know what his role would be in Mr. Putin's new government, set to take office in May. "Man proposes, and God disposes," he said in Spanish.

Write to Ángel González at

Credit: By Ángel González

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 21, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 10086515 71

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1008651571?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Struggles as Shell Thrives

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2012: n/a.

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Speaking to analysts in a conference call, Exxon Vice President of Investor Relations David Rosenthal said the company is reducing the number of rigs drilling for natural gas in the U.S. and switching some of them to oil-rich areas such as the North Dakota Bakken Shale, West Texas's Permian Basin and Oklahoma's Woodford Ardmore.

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Exxon Mobil Corp. reported an 11% decline in first-quarter earnings due to lower oil and gas production and a drop in chemical-business profits, offsetting high global crude prices and improved refining results.

The world's largest oil company by market value reported net income of $9.45 billion, or $2 a share, down from $10.65 billion, or $2.14 a share, a year earlier. Revenue increased 8.8% to $124.05 billion.

Exploration-and-production income was $7.8 billion, a 10% drop from a year earlier, as total production fell 5.5% to 4.55 million barrels of oil equivalent per day.

Exxon's chemicals business saw profit drop 54% to $701 million, but refining-and-marketing earnings climbed 44% to $1.5 billion.

The performance was far below analyst expectations for earnings of $2.09 per share, while production also missed projections.

While Exxon struggled, rival Royal Dutch/Shell PLC appeared to thrive, with first-quarter adjusted profit climbing 16% to $7.3 billion, thanks in part to sales of natural gas in non-U.S. markets, where prices are tied to oil prices.

Shell's exploration-and-production income was up 35% to $6.3 billion while oil-and-gas production was 3.6 million barrels of oil equivalent per day, an increase of 1.4%.

Shares of Exxon slipped 0.9% to $86.07. Class B shares of Shell closed 3.5% higher at £22.66 ($36.58) in London.

Philip Weiss, an analyst with Argus Research, said some of Exxon's earnings miss this quarter is due to timing issues on some projects where it partners with other companies. In many of those deals they are only allowed to sell a certain amount of oil and gas per quarter, even if the projects produce more. That means the Irving, Texas, oil giant can't report income for that production until later quarters.

"But what I found more troubling this quarter was that their production mix ended up a bit more gassy than I expected," Mr. Weiss said, with nearly 51% of production coming from natural gas.

Exxon's U.S. natural-gas production, which has been watched closely because of the company's past insistence if didn't need to ease up on output as prices declined, slipped 1.8% from the fourth quarter and was up less than 1% from a year earlier. The company said it was continuing to shift its focus from dry natural-gas production to fields that produced oil and so-called wet gas, a mix of natural gas and liquid fuels such as ethane, propane and butane that fetch higher prices than dry gas.

Exxon's onshore U.S. rig count is also dropping, from an average of 72 rigs last year to 64 rigs this week, said David Rosenthal, vice president of investor relations.

Exxon's financial strength, including some $19.1 billion in cash at the end of the first quarter, means it doesn't feel pressured to slash U.S. gas production, said Mr. Rosenthal, but during Thursday's call with analysts he gave greater emphasis to future production from oil and other nondry-gas projects than in past earnings calls.

"If you look at the projects we have scheduled to come on line between now and 2016, 80% of them will be liquids production," Mr. Rosenthal said.

The change in drilling focus follows similar moves by other energy producers that have seen cash flows and earnings hit by depressed natural-gas prices, which have been trading at their lowest point in a decade at around $2 per million British thermal units.

The average price at which Exxon sold its natural-gas production in the first quarter was $2.74 per thousand cubic feet, down 20% from the same period a year earlier. The company's realized price for crude oil was $105.68 a barrel, 3% higher than a year earlier.

Despite the different quarterly results Exxon and Shell both said Thursday they are considering new U.S. projects that would take advantage of the 10- year low in natural-gas prices.

Mr. Rosenthal said the company is "studying and assessing the opportunities," including exporting U.S. natural gas as a liquid and expanding its U.S. chemical plants that use natural gas as a raw material. The company is a partner in the recently opened Golden Pass liquefied-natural-gas import terminal near Port Arthur, Texas, which could be expanded to include export capacity, according to analysts.

Shell Chief Financial Officer Simon Henry said on a conference call Thursday his company is looking at sites in Texas and Louisiana for a possible natural-gas-to-liquids plant that would turn natural gas into a fuel like diesel. The Wall Street Journal reported on the project plans earlier this month.

Meanwhile, Shell raised the amount of asset sales it plans for this year as it posted consensus-beating adjusted profit.

"Asset sales for 2012 are likely to be over $4 billion, compared with our earlier guidance of $2 billion to $3 billion," CEO Peter Voser said. He didn't specify where or what assets would be sold.

The Anglo-Dutch company said its clean current cost of supplies earnings, a keenly watched figure that strips out gains or losses from inventories and other nonoperating items, was $7.28 billion in the three months ended March 31, up 16% from $6.29 billion a year earlier. That was above analysts' expectations of $6.75 billion. The adjusted figure is broadly comparable with net income under U.S. accounting rules.

Total oil-and-gas production was 3.552 million barrels of oil equivalent per day, an increase of about 1.4% on the year.

However, net profit for the quarter slipped 0.7% to $8.72 billion from $8.78 billion a year earlier. Higher purchasing costs, which rose nearly 11%, took some of the shine off the bottom line. Group revenue was $123.77 billion, up 7.8%.

Isabel Ordonez and Alexis Flynn contributed to this story.

Write to Isabel Ordonez at

Corrections & Amplifications

Shell's oil-and-gas production increased 1.4%. An earlier version of this story incorrectly stated it was 4%.

Credit: By Tom Fowler

Subject: Natural gas; Petroleum industry; Oil prices; Petroleum production; Stock prices; Corporate profits

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 26, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1009646416

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1009646416?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Struggles As Shell Thrives

Author: Fowler, Tom

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2012: B.6.

ProQuest document link

Abstract:

Exxon Mobil Corp. reported an 11% decline in first-quarter earnings due to lower oil and gas production and a drop in chemical-business profit, offsetting high global crude prices and improved refining results.

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Full text:

Exploration-and-production income was $7.8 billion, a 10% drop from a year ago, as production fell 5.5% to 4.55 million barrels of oil equivalent a day.

Exxon's chemicals business profit fell 54% to $701 million, but refining-and-marketing earnings climbed 44% to $1.5 billion.

The performance was below analyst expectations for earnings of $2.09 a share; its production also missed projections.

While Exxon struggled, rival Royal Dutch/Shell PLC appeared to thrive, reporting first-quarter adjusted profit up 16% to $7.3 billion, due in part to sales of natural gas in non-U.S. markets.

Shell's exploration-and-production income was up 35% to $6.3 billion while oil-and-gas production was 3.6 million barrels of oil equivalent per day, an increase of 1.4%.

Philip Weiss, an analyst with Argus Research, said some of Exxon's earnings miss was due to timing issues on some projects where it partners with other companies. In many of those deals, it is only allowed to sell a certain amount of oil and gas a quarter, even if the projects produce more. That means the Irving, Texas, company can't report income for that production until later quarters.

Exxon's U.S. natural-gas production, which has been watched closely because of the company's past insistence it didn't need to ease up on output as prices declined, slipped 1.8% from the fourth quarter and was up less than 1% from a year earlier. The company said it is continuing to shift its focus from dry natural-gas production to fields that produced oil and so-called wet gas, a mix of natural gas and liquid fuels such as propane that fetch higher prices than dry gas.

Exxon's onshore U.S. rig count also dropped, from an average of 72 rigs in the first quarter of 2011 to an average of 64 rigs in the same quarter of 2012, said David Rosenthal, vice president of investor relations.

The average price at which Exxon sold its natural-gas production in the first quarter was $2.74 per thousand cubic feet, down 20% from the same period a year earlier. Its realized price for crude was $105.68 a barrel, 3% higher than a year earlier.

Despite the different quarterly results Exxon and Shell both said Thursday they are considering new U.S. projects that would take advantage of the 10- year low in natural-gas prices.

Mr. Rosenthal indicated Exxon is studying and assessing exporting U.S. natural gas as a liquid and expanding its U.S. chemical plants that use natural gas as a raw material. The company is a partner in the recently opened Golden Pass liquefied-natural-gas import terminal near Port Arthur, Texas.

Shell CFO Simon Henry said his company is looking at Texas and Louisiana for a possible natural-gas-to-liquids plant.

---

Isabel Ordonez contributed to this article.

Credit: By Tom Fowler

Subject: Petroleum industry; Corporate profits; Financial performance

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Royal Dutch Shell PLC; NAICS: 213112, 221210, 324110

Classification: 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.6

Publication year: 2012

Publication date: Apr 27, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1009794208

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1009794208?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon to Relinquish Block in Brazil's Santos Basin

Author: Gonzalez, Angel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2012: n/a.

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Abstract:

HOUSTON--Exxon Mobil Corp. said Friday it is abandoning its only exploration effort in the Santos Basin, epicenter of Brazil's offshore oil boom, an area where it has obtained mixed results amid tough drilling conditions.

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The block is the Texas behemoth's sole exploration lease in Brazil, which forecasters say is destined to be one of the world's top petroleum producers by the end of the decade thanks to its vast trove of offshore oil and gas.

Exxon and its partners Hess Corp. and Petroleo Brasileiro SA "have agreed to relinquish" the BS-M-22 block in the Santos Basin, spokesman Pat McGinn said. The block is located in the thick of Brazil's burgeoning offshore-oil industry, near some of the largest oil discoveries in recent memory, and was leased under terms that are more favorable to foreign investors than those spelled out in recent regulation.

Exxon, which is celebrating 100 years in the South American country this year, "will continue to look for new business opportunities in Brazil," Mr. McGinn said. He said the local regulator, Agencia Nacional do Petroleo, or ANP, was notified in the first week of April.

The BS-M-22 block, located in the thick of Brazil's burgeoning offshore oil activity, proved a hard nut to crack for Exxon and its partners, underscoring the difficulty of developing Brazil's massive offshore reserves, most of which lie beneath deeply buried, thick layers of salt.

Two wells drilled there, Azulao-1 and Sabia-1, struck oil, but another well, dubbed Guarani, turned out to be dry. A typical deep-water well in the area can cost tens of millions of dollars, and Deutsche Bank AG once estimated that the Guarani well cost about $150 million.

Phil Weiss, an analyst with Argus Research, said the block "has been kind of disappointing so far." While the recognition that the block's resources are out of reach is an "incremental negative" for the companies, at least they won't keep engaging in risky, expensive exploration there, Mr. Weiss said.

Last October, Exxon and its partners had sought to bring in a new partner into the block to share the risk of drilling a new well there, offering a 25% stake. A brochure for the stake said that the prospect was estimated to contain up to 1.5 billion barrels of recoverable oil.

Block BM-S-22 is located about 350 kilometers south of Rio de Janeiro.

Exxon, the world's largest publicly traded oil company, has a 40% interest in the block. Hess has 40% and Petrobras 20%. Exxon is the block's operator.

Write to Angel Gonzalez at

Credit: By Angel Gonzalez

Subject: Petroleum industry; Oil reserves

Location: Texas Brazil

Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Hess Corp; NAICS: 211111, 324110, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Apr 27, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1009899716

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1009899716?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Sees Big Shale-Oil Potential in Siberia

Author: Hall, Simon

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 June 2012: n/a.

ProQuest document link

Abstract:

"Because of our global size and reach, we have businesses that are conducted in a wide range of currencies, and what we have found over the years is that we are mostly naturally hedged without having to do anything in the financial markets from a risk management standpoint.\n

Links: 360 Link to Full Text

Full text:

KUALA LUMPUR--Exxon Mobil Corp. is starting work with Russia's OAO Rosneft in assessing what could be massive reserves of shale oil in Western Siberia, the U.S. oil giant's chief executive, Rex Tillerson, said Tuesday.

"There is huge shale potential in shale rocks in West Siberia...we just don't know what the quality is," Mr. Tillerson said in an interview.

The exploration work will take years to establish if the reserves are commercially viable and are part of a strategic agreement Exxon reached earlier this year with state-controlled Rosneft, Russia's largest oil producer.

"Rosneft wished to participate in some resource development opportunities outside of Russia and we have invited them to farm into some areas in Canada and in Texas, in tight oil," Mr. Tillerson said, adding the agreement also called for Exxon to also help evaluate similar tight resources opportunities in Western Siberia.

Tight oil is mostly, but not exclusively, oil trapped in shale-rock formations that requires advanced fracturing technology to release.

"The shales are basically the source rocks for conventional production in the region and anywhere you have large existing conventional production you are going to find source rocks," he said.

Mr. Tillerson also said he didn't rule out Exxon joining the Russia Barents Sea Shtokman natural-gas project.

"On the right terms," he said, when asked if Exxon might want to farm into the project, possibly by taking part of the stakes held by Statoil ASA or Total SA in the OAO Gazprom-led project.

"At this point, we don't have any discussions ongoing with them," Mr. Tillerson said.

"We were engaged in the early days on discussions to participate in that project; we weren't selected," he said. "We had put forward our views on how that resource might be developed over the long term."

Texas-based Exxon is also exploring shale-gas opportunities in China, he said, where shale could potentially have as big an impact as it had in the US.

"We are in discussions with a couple of the Chinese national oil companies," Mr. Tillerson said, without identifying them. "We are doing some joint studies. We haven't taken a position yet, we are still talking about that and the terms around that."

China's shale gas would have a slower lead-up process than in the U.S. as "they don't have the existing infrastructure as in the U.S., built over a 50- or 60-year period that is needed to facilitate rapid commercialization, such as pipelines, gathering systems, distribution systems. It will be significant for China eventually," Mr. Tillerson said.

Separately, Mr. Tillerson said Exxon is "comfortable" with its exposure to currency movements caused by the debt crisis and economic situation in the European Union.

"We are comfortable about how we are managing our cash situation and our exposure to currencies in Europe," he said.

Write to Simon Hall at

Credit: By Simon Hall

Subject: Petroleum industry; Natural gas; Oil sands

Location: Russia United States--US China

People: Tillerson, Rex W

Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: OAO Gazprom; NAICS: 211111, 221210; Name: Total SA; NAICS: 211111, 324110, 447190

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jun 5, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1018560880

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1018560880?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Invests in Australia Coal-Seam-Gas Venture

Author: Winning, David

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2012: n/a.

ProQuest document link

Abstract:

More than 20 billion Australian dollars (US$19.5 billion) was spent in 2008 on coal-seam-gas deals in Australia's northeastern Queensland state alone by companies including Royal Dutch Shell PLC, ConocoPhillips and U.K.-based BG Group PLC. However, the coal-seam gas-industry has faced a backlash from some politicians and environmentalists in Australia due to leaks at wells in Queensland, some resources companies accessing private land without permission and worries regarding potential groundwater contamination and the safety of new drilling techniques.

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MELBOURNE--Exxon Mobil Corp. is taking a 10% stake in a joint venture to explore for gas trapped in Australian coal seams, placing a bet on an unconventional fuel that has attracted billions of dollars of investment in Australia and become one of the world's hottest energy plays.

Exxon's Esso Ventures unit is teaming up with closely held Ignite Energy Resources Ltd. to explore and potentially develop reserves of methane gas occurring naturally in more than 16 billion metric tons of brown coal close to the surface in the Gippsland Basin of southeastern Victoria state, and more than 280 billion tons in deeper seams.

International energy companies like Exxon are tapping unconventional fuels such as coal-seam gas in Australia and shale gas in the U.S., after finding themselves increasingly locked out of easy-to-access oil and gas fields in countries like Russia, Saudi Arabia and Venezuela.

Australia's stable political system, transparent regulatory regime and proximity to fast-growing energy markets in Asia make the country appealing to investors.

However, the coal-seam gas-industry has faced a backlash from some politicians and environmentalists in Australia due to leaks at wells in Queensland, some resources companies accessing private land without permission and worries regarding potential groundwater contamination and the safety of new drilling techniques.

The Victorian state government this week committed to national rules covering unconventional-gas industries, designed to protect underground water sources used by farmers. The rules were formulated in February by the federal government and states with more mature industries, such as Queensland and New South Wales.

Texas-based Exxon is one of Australia's largest energy investors, owning a refinery in Victoria and several big conventional-oil-and-gas fields. These include a 25% stake in the A$43 billion Gorgon gas project, the country's largest gas resource.

Exxon's drilling for conventional oil and gas over nearly 50 years in the Bass Strait, a stretch of water between Victoria and the island state of Tasmania, enabled the company to build up a store of geological data that convinced it of the area's potential for coal-seam-gas output.

Roughly two-thirds of the Gippsland Basin is in the mainly shallow waters of the Bass Strait, with the remainder extending onshore in southeast Victoria.

"Over the next 12-18 months Exxon Mobil and Ignite Energy Resources will work together to evaluate and assess the natural gas potential in the deeper coal seams of the license and determine whether it can be commercially produced," the companies said in a joint written statement on Wednesday.

Ignite Energy Resources, which was advised by Citigroup Inc., will be the operator in the first phase of a program to explore an onshore area of about 3,800 square kilometers. The region is covered by Exploration License 4416.

Exxon's venture with Ignite Energy Resources is small compared with the billions of dollars spent by peers elsewhere in Australia. That is largely because coal-seam-gas exploration in Victoria is in its infancy, whereas Queensland's coal-seam-gas industry is well-established and accounts for 90% of the state's gas demand.

The biggest Queensland projects also involve the construction of liquefied-natural-gas terminals to feed Asia's gas demand.

Coal-seam-gas exploration might attract less opposition in Victoria compared with elsewhere in the country because the state lacks the resource wealth of Western Australia and Queensland, and few new conventional-gas discoveries are being made in its traditional supply hub of the Bass Strait.

Much of Victoria's power supply comes from burning dirty coal, so switching to gas has some environmental benefits.

Exploration in the Gippsland Basin is expected to involve minimal or no fracking--a controversial drilling technique that shatters rock to stimulate the flow of gas--while water contained in the coal seams has low levels of salinity.

Sydney-based Ignite Energy Resources also has interests in biofuels and mineral sands, and an agreement to supply TRUenergy, a unit of CLP Holdings Ltd., with upgraded energy products such as synthetic crude oil for use in the Yallourn power plant in Victoria. CLP is listed in Hong Kong.

Write to David Winning at

Credit: By David Winning

Subject: Petroleum industry; Oil sands; Pipelines; Contamination; Coal

Location: United States--US Asia Queensland Australia Western Australia Australia

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jun 6, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1018588291

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1018588291?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon to Invest in Coal-Seam Gas Venture in Australia

Author: Winning, David

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 June 2012: B.6.

ProQuest document link

Abstract:

More than 20 billion Australian dollars (US$19.5 billion) was spent in 2008 on coal-seam-gas deals in Australia's northeastern Queensland state alone by companies including Royal Dutch Shell PLC, ConocoPhillips and U.K.-based BG Group PLC. However, the coal-seam-gas industry has faced a backlash from some politicians and environmentalists in Australia due to well leaks in Queensland; resources companies accessing private land without permission; and worries regarding the safety of new drilling techniques.

Links: 360 Link to Full Text

Full text:

MELBOURNE-- Exxon Mobil Corp. is taking a 10% stake in a joint venture to explore for gas trapped in Australian coal seams, placing a bet on an unconventional fuel that has attracted billions of dollars of investment in Australia and become one of the world's hottest energy plays.

Exxon's Esso Ventures unit is teaming up with closely held Ignite Energy Resources Ltd. of Australia to explore and potentially develop reserves of methane gas occurring naturally in more than 16 billion metric tons of brown coal close to the surface in the Gippsland Basin of southeastern Victoria state, and more than 280 billion tons in deeper seams.

Australia's stable political system, transparent regulatory regime and proximity to fast-growing energy markets in Asia make the country appealing to investors.

However, the coal-seam-gas industry has faced a backlash from some politicians and environmentalists in Australia due to well leaks in Queensland; resources companies accessing private land without permission; and worries regarding the safety of new drilling techniques.

The Victoria state government this week committed to national rules covering unconventional-gas industries and designed to protect underground water sources used by farmers. The rules were formulated in February by Australia's federal government and states with more mature industries, such as Queensland and New South Wales.

Texas-based Exxon is one of Australia's largest energy investors, owning a refinery in Victoria and several big conventional-oil-and-gas fields. The company's interests include a 25% stake in the A$43 billion Gorgon gas project, the country's largest gas resource.

Roughly two-thirds of the Gippsland Basin is in the mainly shallow waters of the Bass Strait, with the remainder extending onshore in southeast Victoria.

Ignite Energy Resources, which was advised by Citigroup Inc., will be the operator in the first phase of a program to explore an onshore area of1,460 square miles.

Exxon's venture with Ignite Energy Resources is small compared with the billions of dollars spent by peers elsewhere in Australia.

That is largely because coal-seam-gas exploration in Victoria is in its infancy, whereas Queensland's coal-seam-gas industry is well established and accounts for 90% of the state's gas demand.

Credit: By David Winning

Subject: Petroleum industry; Oil sands; Coal; Gas industry; Equity stake; Joint ventures; Coalbed methane

Location: United States--US Queensland Australia Australia

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Esso Ventures Pty Ltd; NAICS: 211111; Name: Ignite Energy Resources Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 1300: International trade & foreign investment; 8510: Petroleum industry; 9179: Asia & the Pacific; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.6

Publication year: 2012

Publication date: Jun 7, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1018853622

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1018853622?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Expands Rosneft Alliance to Siberian Shale

Author: Ordonez, Isabel; Stilwell, Victoria

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2012: n/a.

ProQuest document link

Abstract:

Exxon Mobil Corp. said Friday it agreed to develop so-called tight oil reserves in Western Siberia with Russian partner OAO Rosneft, in the Texas energy giant's latest effort to replicate the U.S. shale boom globally.

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Exxon and state-controlled Rosneft will use technology that the U.S. oil company already employs in unconventional oil and gas formations in North America. The agreement is the latest chapter in a strategic deal between the two oil companies that includes offshore exploration of massive energy reserves in Russia's Arctic Sea and the Black Sea.

Exxon and Rosneft said they expect to soon approve geological studies and drilling for selected Rosneft license blocks in Western Siberia, including the Bazhenov and Achimov reservoirs. Exxon, the world's largest publicly traded oil company by market value, will finance the studies and exploratory drilling, which is expected to begin in 2013.

The Bazhenov Shale is believed to hold many times more oil than the prolific Bakken Shale in North Dakota, and it has the potential to be one of the world's largest sources of shale oil, Oswald Clint, an analyst at Bernstein Research, wrote in a recent note to clients.

The venture comes at a time when Exxon has been increasing its foothold on unconventional oil and gas development, not only in North America, but all over the globe. The company, which is exploring for shale oil and gas in Germany and Argentina, recently revealed it will also develop tight oil in Colombia and that it was evaluating the potential of shale oil and gas in China. Exxon has said a key component of its $25 billion acquisition of shale producer XTO Energy in 2010 was transferring the know-how that allowed the company to unlock vast new reserves of natural gas in the U.S. through hydraulic fracturing, or fracking.

The agreement is also an indicator of a re-emerging symbiosis between international oil companies and Russia, which needs to replace its declining oil production with an ever-larger amount of hard-to-exploit crude if it is to remain one of the world's energy powers. In recent months Eni SpA and Statoil ASA have also signed deals with Russian companies to develop Arctic fields.

One of the main challenges of developing Western Siberia's unconventional oil resources will be contracting enough rigs to perform the intense drilling required in shale exploration, Bernstein's Mr. Clint said. Rigs there would be able to drill half the annual number of wells as rigs in the U.S., due to the Western Siberian weather, he said.

Exxon and Rosneft also agreed to establish a joint Arctic Research Center for Offshore Developments. The center will provide services to support all stages of oil and gas development on the Arctic shelf, including the design of ice-resistant offshore vessels, structures and Arctic pipelines.

The work to start tapping Western Siberia's tight oil reserves was mentioned by Exxon Chief Executive Rex Tillerson in an interview earlier this month. At the time, Mr. Tillerson said "there is huge shale potential in shale rocks in West Siberia...we just don't know what the quality is."

Simon Hall contributed to this article.

Credit: By Isabel Ordonez And Victoria Stilwell

Subject: Oil reserves; Petroleum industry; Energy policy; Hydraulic fracturing; Oil shale

Location: Arctic region Russia United States--US Texas Black Sea North America

People: Tillerson, Rex W

Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Eni SpA; NAICS: 211111, 324110; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jun 15, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1020571213

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1020571213?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Ends Drilling For Poland Shale Gas

Author: Ordonez, Isabel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 June 2012: B.2.

ProQuest document link

Abstract:

The future of shale development in Poland received an earlier setback in March after Poland's national geological institute estimated the country's recoverable reserves of shale gas were as much as 10 times lower than earlier estimates by the U.S. Energy Information Administration.

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Exxon Mobil Corp. will stop exploring for natural gas in shale formations in Poland, dealing a blow to hopes the country could replicate the shale-drilling boom that revolutionized gas production in North America.

Major companies including Exxon, Chevron Corp., ConocoPhillips and Marathon Oil Corp. flocked to Poland in recent years after the country started offering incentives to lure international firms. Poland is hoping to reduce its long-term dependence on gas imports from Russia.

But Exxon said Monday it is pulling the plug on additional exploration in Poland, after two early gas wells failed to yield commercial quantities. The company said last year that it was looking to sell stakes in four shale-gas concessions there. It acquired rights to explore for shale gas in Poland in 2008.

"We have completed exploration operations in Poland," spokesman Patrick McGinn said. "There have been no demonstrated sustained commercial hydrocarbon flow rates in our two wells in the Lublin and Podlasie basins."

Exxon wasn't the first company to report disappointing early well results in Poland. Oil-and-gas explorer BNK Petroleum Inc. said in October that results of a well drilled in the Cambrian and Ordovician shale, in north Poland, were inconclusive and delayed testing in another area in the country.

Leslie Palti-Guzman, an analyst at consultancy Eurasia, said Exxon's exit from Poland is "clearly not a positive signal" for shale exploration there. However, she said it is too early to extrapolate Exxon's results to other areas in Poland where rival companies are drilling wells.

Chevron said it "remains committed" to its current exploration program in the country. Its acreage is in southeast Poland, while Exxon's properties were in the country's center.

ConocoPhillips said it is "still in the early stages of exploration in Poland" and that it has "no plans to exit at this time." Its acreage is in northern Poland.

Marathon said it "continues to explore and evaluate the potential of our holdings in Poland." The company has drilled two exploration wells, begun work on a third and plans to drill more in the country by the end of the year.

The EIA estimates the U.S. has 2,214 trillion cubic feet of technically recoverable natural-gas resources. Poland's geological institute's most optimistic estimate of shale-gas deposits is 67.1 trillion cubic feet.

Poland's government said in March that oil companies needed to drill more test wells to determine the country's resources with more precision.

Credit: By Isabel Ordonez

Subject: Petroleum industry; Oil shale; Natural gas exploration

Location: Russia North America Poland

Company / organization: Name: Chevron Corp; NAICS: 211111, 324110; Name: ConocoPhillips Co; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 8510: Petroleum industry; 9175: Western Europe

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2012

Publication date: Jun 19, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1020946003

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1020946003?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon: 'Losing Our Shirts' on Natural Gas

Author: DiColo, Jerry A; Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 June 2012: n/a.

ProQuest document link

Abstract:

Exxon is following the trend of smaller companies, such as Cheniere Energy Inc., that have already pursued the necessary permits to export gas from the U.S. On Wednesday, he said there are enough U.S. oil and gas reserves to provide the domestic economy with fuel through the rest of the century if public policy encourages the industry.

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NEW YORK---Even energy titan Exxon Mobil Corp. is showing signs of strain from low natural-gas prices.

On Wednesday Exxon Chief Executive Rex Tillerson broke from the previous company line that it wasn't being hurt by natural gas prices, admitting that the Irving, Texas-based firm is among those hurting from the price slump.

"We are all losing our shirts today." Mr. Tillerson said in a talk before the Council on Foreign Relations in New York. "We're making no money. It's all in the red."

His comments mark a departure from remarks made earlier this year on how lower natural-gas prices hadn't yet hurt the company because of its operational efficiency and low production costs.

The comments from Exxon's chief come amid a massive U.S. gas supply glut that has kept prices depressed and helped to reduce energy costs for many consumers and businesses. In recent months, demand for natural gas from utilities has surged as firms turn to gas instead of more expensive coal to supply electricity. Just as Mr. Tillerson was speaking, however, natural-gas prices rallied to a 5 1/2-month high, with the July contract settling at $2.774 per million British thermal units, the fifth straight day of gains.

Exxon's $26 billion acquisition of XTO Energy in 2010 made the company the largest producer of natural gas in the U.S.; among U.S. integrated oil companies, it is the one that has bet the most on the value of unconventional natural-gas production.

Mr. Tillerson said last month during Exxon's shareholders' meeting that he had "no regrets" on the timing of the XTO purchase, which occurred just before the most recent slump in U.S. gas prices. At the company's annual analysts' meeting in March, Exxon said production costs varied greatly from project to project, but it wasn't losing money on its natural-gas production.

But the executive acknowledged Wednesday that Exxon and most of the industry had "grossly underestimated" the speed of the U.S. natural-gas boom, as the technology to unlock gas trapped in shale-rock formations, known as hydraulic fracturing, advanced faster than expected.

"It shows even Exxon can feel the pain from low natural-gas prices," said Fadel Gheit, an analyst with Oppenheimer & Co.

In April the company said the average price at which it sold its natural-gas production in the first quarter was $2.74 per million British thermal units, down 20% from the same period a year earlier. That price reflects a combination of spot prices and long-term contracted sales, but analysts expect that figure to drop.

Market prices have averaged about $2.20 per million British thermal units in the second quarter, down from $2.70 in the first quarter, said Guy Baber, an analyst with Simmons & Co. International. Even during the worst days of 2011, prices averaged more than $3.50.

"The message from Tillerson is candid and maybe a bit different than in the past, but I think this is largely because natural-gas prices are so much weaker now than they have been," Mr. Baber said.

That doesn't mean Exxon will necessarily stop drilling for natural gas, however.

The company has started to shift its drilling toward sites with greater potential for oil and natural-gas liquids, but it has said repeatedly it believes natural gas will grow significantly in the coming decades. The company is designing drilling programs on most of its U.S. gas fields to better assess the long-term prospects of the assets, not capture short-term production and revenue gains.

With first-quarter earnings of $9.45 billion and cash reserves of $19.1 billion, Exxon has the balance sheet and financial strength to be patient and keep drilling gas wells, unlike many smaller oil companies, Mr. Baber said.

In his talk, Mr. Tillerson said energy companies won't be able to continue drilling unless prices rise.

More recently, Exxon has been studying the possibility of exporting natural gas from the U.S. Gulf Coast and from Canada as shale drilling has unlocked natural-gas reserves to allow exports.

Exxon is following the trend of smaller companies, such as Cheniere Energy Inc., that have already pursued the necessary permits to export gas from the U.S.

On Wednesday, he said there are enough U.S. oil and gas reserves to provide the domestic economy with fuel through the rest of the century if public policy encourages the industry.

"To say the U.S. is energy poor is simply not accurate," Mr. Tillerson said. He added U.S. energy security is "a matter of policy choices" and could be achieved "within the visible future."

North America has become an important area for the development of new energy resources in recent years, with surging production in both Canada and the U.S. Mr. Tillerson said he was "hopeful" that reforms in Mexico would make possible further collaboration between Exxon and Mexico's state-owned oil company, Petroleos Mexicanos, or Pemex.

Write to Jerry A. DiColo at and Tom Fowler at

Credit: By Jerry A. DiColo And Tom Fowler

Subject: Petroleum industry; International relations; Energy industry

Location: United States--US New York

People: Tillerson, Rex W

Company / organization: Name: XTO Energy Inc; NAICS: 211111; Name: Council on Foreign Relations; NAICS: 813910, 541720; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jun 27, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1022297887

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1022297887?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

One-Time Gain Boosts Exxon's Net Profit

Author: González, Ángel; Stynes, Tess

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 July 2012: n/a.

ProQuest document link

Abstract:

ConocoPhillips on Wednesday reported its second-quarter earnings fell 33% during its first quarterly reporting period as a pure-play exploration and production company, as its performance was hit by lower oil and natural-gas prices.

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Exxon Mobil Corp.'s second-quarter earnings rose 49% on a net gain related to divestments and tax-related items, though exploration and production profits fell on lower energy prices and production.

The world's largest publicly traded oil company reported earnings of $15.9 billion, or $3.41 a share, up from $10.68 billion, or $2.18 a share, a year earlier. The figure, a record for the company, includes $7.5 billion in gains from the sale of Japanese refining and chemical assets and tax-related items.

Revenue increased 1.5% to $127.36 billion.

Analysts polled by Thomson Reuters projected earnings of $1.95 a share on revenue of $115.08 billion. Analysts with Simmons & Co. said that after taking out the asset sales and tax bump, earnings of $1.80 per share were disappointing.

"Relative to our expectations, production volumes were disappointing and natural gas realizations lagged market indicators," the Simmons analysts said in a research note.

Big oil companies have been expected to report lower second-quarter earnings this week, as a global economic slowdown triggered a sharp drop in prices toward the end of the reporting period. And although the one-time items pushed Exxon's earnings higher, its earnings from the sale of oil and gas, down 2.4%, clearly followed that trend.

A decline in oil and gas production, down 5.6%, contributed to the drop, and so did a weak environment for natural-gas prices in the U.S. Irving, Texas-based Exxon, the largest natural-gas producer in the U.S. after its acquisition in 2010 of XTO Energy Inc., saw its U.S. oil and gas profits drop by more than half to $678 million from $1.4 billion in the same period last year. The drop was somewhat offset by an increase in international oil and gas earnings, which rose to $7.68 billion from $7.1 billion last year.

Downstream earnings saw a $5.3 billion bump from last year, entirely due to the restructuring of Exxon's Japan operations. Higher margins, which analysts expected to contribute significantly due to the drop in oil prices, were offset by operating expenses, foreign currency moves and one-time tax items.

Chemical earnings may have accounted for some of the earnings disappointment, said Raymond James analyst Pavel Molchanov. Disregarding asset-sales gains, the segment, which has been pushed up recently by low natural-gas prices in North America, brought in some $820 million, below Raymond James's expectations of $1.2 billion, Mr. Molchanov said. "If it were not for the chemicals issue, I think earnings would have been in line," he said.

The company said weaker margins, unfavorable foreign-currency effects and other items had an impact on chemical earnings.

Exxon, which has been criticized for its large bets on natural gas in the midst of a market glut for the commodity, reduced its capital spending in the U.S. significantly from last year. The company invested $2.6 billion in its U.S. upstream unit, down from $4 billion in the same period last year. In contrast, its international spending grew to $5.7 billion from $5.3 billion.

During the quarter, Exxon Mobil repurchased 60 million common shares at a cost of $5 billion to reduce shares outstanding.

ConocoPhillips Wednesday reported its second-quarter earnings fell 33% during its first quarterly reporting period as a pure-play exploration-and-production company. Its performance was hit by lower oil and natural-gas prices. Chevron Corp., the second largest U.S. oil company after Exxon, is set to report its second-quarter results Friday.

Meanwhile, Royal Dutch Shell PLC on Thursday posted worse-than-expected second-quarter earnings, as higher oil and gas output failed to compensate for weaker energy prices and slack consumer demand.

Brent-crude prices averaged 7% less than in the corresponding period last year, but it was lower U.S. natural-gas prices that particularly dented profit at Europe's largest energy firm.

London-based Shell blamed the poor global macroeconomic environment for the near 13% fall in adjusted profit. Net profit, meanwhile, fell 53.1% to $4.06 billion. The Anglo-Dutch energy company said its profit on the basis of clean current cost of supplies, a keenly watched figure that strips out gains or losses from inventories and other nonoperating items, was $5.72 billion in the three months ended June 30, compared with $6.55 billion in the second quarter of 2011. This was below expectations of $6.46 billion in a Dow Jones Newswires poll of eight analysts.

Revenue was $119.89 billion, compared with $124.56 billion in the second quarter of 2011.

Alexis Flynn contributed to this article.

Write to Tess Stynes at

Credit: By Ángel González And Tess Stynes

Subject: Petroleum industry; Stock prices; Financial performance; Corporate profits; Divestments

Location: United States--US Japan

Company / organization: Name: Chevron Corp; NAICS: 211111, 324110; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jul 26, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1027869899

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1027869899?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

For Exxon, Natural Gas Becomes a Costly Burden

Author: Fowler, Tom; Gold, Russell

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 July 2012: n/a.

ProQuest document link

Abstract:

The oil and natural-gas production boom sweeping the U.S. may be good for the country's economic health, but it hasn't recently been much help to energy giant Exxon Mobil Corp. Lackluster second-quarter financial results from Exxon's U.S. oil and natural-gas production cast a shadow on the record global profit the company reported Thursday.

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The oil and natural-gas production boom sweeping the U.S. may be good for the country's economic health, but it hasn't recently been much help to energy giant Exxon Mobil Corp.

Lackluster second-quarter financial results from Exxon's U.S. oil and natural-gas production cast a shadow on the record global profit the company reported Thursday.

With its 2010 purchase of natural-gas driller XTO Energy, Exxon became the biggest gas producer in the country--shortly before natural-gas prices began heading toward 10-year lows. Exxon, based in Irving, Texas, said Thursday it believes its $31 billion purchase was a strong strategic move and is optimistic that natural-gas prices will rebound.

But analysts continue to question the deal as it weighed on the company's U.S. earnings and appears set to do the same for more quarters to come. Exxon spent about 29% of its capital expenditures on U.S. drilling operations but generated only 4% of its profit in this segment.

Exxon reported second-quarter net income of $15.9 billion, up from $10.68 billion a year earlier and a quarterly record for the company. It appears to be a record for any U.S. company under current accounting rules, according to Howard Silverblatt, a senior analyst with Standard & Poor's.

About $7.5 billion of that profit, however, came from asset sales--including the disposal of some of Exxon's Japanese refining business--and tax-related losses. Without those items, profit totaled $8.4 billion, or $1.80 per share, below most analysts' estimates.

Revenue rose 1.5% to $127.36 billion.

Exxon's U.S. exploration-and-production business reported profit down 53% to $678 million because of lower natural-gas and oil prices. Its U.S. refining business reported an improvement thanks in part to those same lower prices, with refining profit up 13.6% to $834 million. But chemical profit fell 20% to $494 million.

Exxon's XTO acquisition was meant to bolster its reserves and give it exposure to the growing business of extracting natural gas from shale formations in the U.S. Natural-gas prices have fallen due to excess domestic production, dipping below $2 per million British thermal units earlier this year before rebounding to just above $3.

The company said earlier this year it had made the purchase knowing that gas prices would decline, but Exxon CEO Rex Tillerson told analysts this spring he hadn't expected the persistence of the U.S. economic slump, which dented demand for natural gas.

Analysts have raised concerns about whether Exxon would have to write down the value of its natural-gas reserves given persistently low prices, as Encana Corp. of Canada did Wednesday to the tune of $1.7 billion.

David Rosenthal, Exxon's vice president of investor relations, said Thursday the company erred on the conservative side when valuing its reserves and didn't anticipate the need to revise them.

Other major oil and gas companies have been hurt by lower oil and gas prices, but few of the big diversified companies appear to be feeling the impact as much as Exxon, which reduced gas as a percentage of its overall energy production to under 47% in the second quarter, down from over 51% in the first quarter.

Chevron Corp., which reports earnings Friday, has just 31% of its U.S. production from natural gas, while BP PLC, which reports Tuesday, has 42%. About 45% of Royal Dutch Shell PLC 's U.S. production is natural gas; the company reported Thursday that its net profit fell 53% to $4.06 billion because of poor global economic conditions and lower oil and gas prices.

Exxon said most of the drilling rigs it had under contract in the U.S. during the second quarter were drilling for oil or liquids used in chemical manufacturing, rather than natural gas. The company emphasized that it was ramping up oil projects in the U.S., including in North Dakota's Bakken Shale, where it is now producing about 32,000 barrels of oil equivalent per day, double the output from a year ago.

The company continues to invest heavily in the U.S. despite declining production revenues. It spent $2.66 billion in the second quarter on oil-and-gas exploration in the U.S., down from $4.08 billion in the same quarter last year when Exxon expanded its stake in the Marcellus Shale in the eastern U.S., but up 23% from the third quarter of 2011. The company started drilling two exploration wells in the deepwater Gulf of Mexico.

Companies need to continue to invest in production, even when prices are weak, said Fadel Gheit, an analyst with Oppenheimer & Co.

"Most large companies are facing an uphill battle, maintaining, let alone growing production," Mr. Gheit said. "Replacing reserves at a competitive cost is the most critical issue facing these companies."

Exxon stock closed up 1.3% at $86.52 on the record global profit, lifting its market capitalization to $404.6 billion.

Alexis Flynn and Daniel Gilbert contributed to this story.

Write to Tom Fowler at and Russell Gold at

Credit: By Tom Fowler And Russell Gold

Subject: Oil reserves; Petroleum industry; Natural gas reserves; Oil sands

People: Tillerson, Rex W

Company / organization: Name: Standard & Poors Corp; NAICS: 511120, 523999, 541519, 561450; Name: Exxon Mobil Corp; NAICS: 211111, 447110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Jul 26, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1027936821

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1027936821?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

For Exxon, Natural Gas Becomes a Costly Burden

Author: Fowler, Tom; Gold, Russell

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 July 2012: B.1.

ProQuest document link

Abstract:

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Full text:

The oil and natural-gas production boom sweeping the U.S. may be good for the country's economic health, but it hasn't recently been much help to energy giant Exxon Mobil Corp.

Lackluster second-quarter financial results from Exxon's U.S. oil and natural-gas production cast a shadow on the record global profit the company reported Thursday.

With its 2010 purchase of natural-gas driller XTO Energy, Exxon became the biggest gas producer in the country -- shortly before natural-gas prices began heading toward 10-year lows. Exxon, based in Irving, Texas, said it believes its $31 billion purchase was a strong strategic move and is optimistic that natural-gas prices will rebound.

About $7.5 billion of that profit, however, came from asset sales -- including the disposal of some of Exxon's Japanese refining business -- and tax-related losses. Without those items, profit totaled $8.4 billion, or $1.80 per share, below most analysts' estimates.

Revenue rose 1.5% to $127.36 billion.

Exxon's U.S. exploration-and-production business reported profit down 53% to $678 million because of lower natural-gas and oil prices.

David Rosenthal, Exxon's vice president of investor relations, said Thursday the company erred on the conservative side when valuing its reserves and didn't anticipate the need to revise them.

Other major oil and gas companies have been hurt by lower prices, but few of the big diversified companies appear to be feeling the impact as much as Exxon, which reduced gas as a percentage of its overall energy production to under 47% in the second quarter, down from over 51% in the first quarter.

Exxon emphasized that it was ramping up oil projects in the U.S., including in North Dakota's Bakken Shale, where it is now producing about 32,000 barrels of oil equivalent per day, double the output from a year ago.

Companies need to continue to invest in production, even when prices are weak, said Fadel Gheit, an analyst with Oppenheimer & Co.

Exxon stock closed up 1.3% at $86.52 on the record global profit, lifting its market capitalization to $404.6 billion.

---

Alexis Flynn and Daniel Gilbert contributed to this story.

Subscribe to WSJ:

Credit: By Tom Fowler and Russell Gold

Subject: Oil reserves; Petroleum industry; Natural gas reserves; Financial performance; Corporate profits; Natural gas

Location: United States--US

People: Tillerson, Rex W

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 9190: United States; 8510: Petroleum industry; 3400: Investment analysis & personal finance

Publication title: Wall Street Jo urnal, Eastern edition; New York, N.Y.

Pages: B.1

Publication year: 2012

Publication date: Jul 27, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1028004195

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1028004195?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Who Really Gets Rich Off High Gas Prices? Exxon made seven cents per gallon in 2011. Federal, state and local governments siphoned off 50 cents in taxes.

Author: Johnson, Drew

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Aug 2012: n/a.

ProQuest document link

Abstract:

Crude oil costs make up about 76% of the cost of gasoline, according to U.S. Energy Information Administration (EIA). [...]2.66 of a $3.50 gallon of gasoline is set before the oil is even refined.

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With the average price of gas in America hovering around $3.50 per gallon for regular unleaded, it costs more than $50 to fill a typical car's 15-gallon tank this summer. Why does gas cost so much?

You may blame high gas prices on rich oil company executives or greedy gas station owners. The truth is that governments rake in a larger profit at the pump than anyone--and with gas taxes on the rise in many parts of the country, there's no relief in sight.

The price of a gallon of gas is based on the combination of four costs: that of crude oil, of refining gas, of distribution and marketing, and of taxes.

Crude oil costs make up about 76% of the cost of gasoline, according to U.S. Energy Information Administration (EIA). Thus $2.66 of a $3.50 gallon of gasoline is set before the oil is even refined. Global markets, reacting to supply and demand, determine the cost of crude oil. Just like any commodity, from gold to corn, a shortage in supply or an increase in demand leads to a rise in prices.

Refining oil is the next step in the process--and the next expense for drivers. Gasoline is extracted from crude oil and additives, including lubricants and detergents to reduce engine deposits, are added. As of January 2012, the EIA found that refining was responsible for 6% of the cost of gasoline.

Distribution and marketing--the part of the process most apparent to consumers--constitutes another 6% of gas prices. That portion of the cost includes the shipping and transportation of the gasoline, a markup to cover retailers' expenses, and any advertising created to appeal to customers.

The remaining 12%--or almost 50 cents per gallon today--goes directly to federal, state and local governments in an array of sales and excise taxes. The federal gas tax is 18.4 cents on every gallon of gasoline sold in America. State gas-tax rates vary from a low of eight cents per gallon in Alaska to a jarring 49 cents per gallon in New York. Other states where it's steep to fill up include California and Connecticut--each with 48.6-cent-per-gallon gas taxes--and Hawaii, at 47.1 cents per gallon.

Some local governments have gotten in on the act, too. In California, local sales and excise taxes on gasoline average 3.1%, according to the Los Angeles Times. That works out to about 12 cents in local taxes for each gallon of gas, based on the state's current average of $3.80 per gallon.

Skokie, Ill., a suburb north of Chicago, levies a gas tax of three cents per gallon. You'll pay an extra nickel per gallon at gas stations in Eugene, Ore. And the next time you're gambling in Las Vegas, you'll need plenty of cash left over to cover Clark County's 10 cent local tax on a gallon of gas. In Florida, Brevard County (home to the Kennedy Space Center) expects to siphon more than $15 million from motorists this year, according to the newspaper Florida Today.

Put this all together, and government makes far more from gas sales than all of the oil companies put together. Exxon, for example, made only seven cents per gallon of gasoline in 2011. That's a drop in the bucket compared to the nearly 50 cents per gallon that federal, state and local governments rake in on an average gallon of gas pumped in the U.S.

Most people have to drive--whether to work, to the grocery store, to pick up kids from school or for dozens of other reasons. For some families struggling to make ends meet, paying 50 cents per gallon in taxes may be the difference between driving to work and putting dinner on the table.

So the next time you begin to blame oil companies, speculators or service stations for high gas prices, remember that no one get richer off of gasoline than government.

Mr. Johnson is a senior fellow at the Taxpayers Protection Alliance.

Credit: By Drew Johnson

Subject: Gasoline prices; Gasoline taxes; Costs; Tax rates; Price increases

Location: California United States--US

Company / organization: Name: Los Angeles Times; NAICS: 511110

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Aug 2, 2012

Section: Opinion

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1030788320

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Last updated: 2017-11-19

Database: The Wall Street Journal

Qatar Petroleum-Exxon Venture Requests Permit to Export U.S. Natural Gas

Author: González, Ángel; Lefebvre, Ben

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Aug 2012: n/a.

ProQuest document link

Abstract: None available.

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HOUSTON--Golden Pass Products LLC, a joint venture between Exxon Mobil Corp. and Qatar Petroleum, is asking federal authorities for permission to export large quantities of liquefied natural gas made in the U.S. from an existing terminal near the Texas-Louisiana border, an executive said Friday.

If permission is granted, Exxon, the biggest natural-gas producer in the country, and its partner would spend $10 billion converting a recently finished terminal built near Port Arthur, Texas, to import natural gas into a facility capable of exporting 15.6 million tons of LNG per year, or approximately two billion cubic feet per day. The U.S. produces about 72 billion cubic feet of natural gas a day.

If permission is granted, Exxon, the biggest natural-gas producer in the country, and its partner would spend $10 billion converting a recently finished terminal built to import natural gas into a facility capable of exporting 15.6 million tons of LNG per year, or approximately two billion cubic feet per day. The U.S. produces about 72 billion cubic feet of natural gas a day.

The move acknowledges the dramatic shift in energy markets produced by the development of techniques to produce natural gas from shale formations across the U.S. After years of fretting about natural gas scarcity and spending billions constructing import terminals to bring the fuel from places as far as Qatar and West Africa, energy companies now seek to turn the U.S. into a major energy exporter.

"The market changed from what we originally envisioned," said Bill Davis, Project Executive for Golden Pass Products. "Something changed along the way--it was the discovery of vastly significant gas resources."

The joint venture's application is for export to countries with which the U.S. has a free-trade treaty; it says it will submit an additional application for countries that haven't signed free-trade agreements with the U.S. soon. Mr. Davis said it could take several years to get regulatory approval and up to five years to build the liquefaction facilities at the terminal.

A rival company, Cheniere Energy Inc., already has authorization to ship LNG world-wide from a terminal near Exxon's Golden Pass Facility. But Exxon's application puts its heft behind the controversial drive to export U.S. natural gas. Proponents say that exports will boost the U.S. economy and create jobs, while critics charge that exporting will raise prices for domestic consumers and lead to greater use of the drilling method known as hydraulic fracturing, which some environmentalists fear could cause pollution.

U.S. natural gas producers, straining under a collapse in domestic prices, have hoped for the chance to sell natural gas to overseas markets where prices can be much higher. As new drilling technology helped unlock increasing amounts of natural gas, prices plummeted to $1.90 per million British thermal units in April from nearly $14 per million British thermal units in July 2008.

Natural gas futures for September delivery closed Friday at $2.719 per million British thermal units, down 0.5 cent, or 0.2%, as traders worried that excess supply would continue despite a drop in the number of rigs drilling for natural gas. The U.S. produces about 72 billion cubic feet a day of natural gas.

Customers from the U.K., Korea, India and Spain have already contracted supply from Cheniere. The company, which recently gave the order to start building the facility, expects to start deliveries in 2015.

In addition to Qatar Petroleum and Exxon, the Golden Pass LNG Terminal and a pipeline connecting it to the natural gas transmission network are also owned in part by ConocoPhillips.

Write to Ángel González at and Ben Lefebvre at

Corrections & Amplifications Golden Pass Products is asking federal authorities for permission to export liquefied natural gas from a terminal near Port Arthur, Texas. An earlier version of this article incorrectly said the terminal was in Louisiana.

Credit: By Ángel González And Ben Lefebvre

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Aug 17, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1033786416

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1033786416?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Seeks to Export Gas

Author: Gonzalez, Angel; Lefebvre, Ben

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Aug 2012: B.3.

ProQuest document link

Abstract:

Corrections & Amplifications A joint venture between Exxon Mobil Corp. and Qatar Petroleum called Golden Pass Products is asking federal authorities for permission to export liquefied natural gas from a terminal near Port Arthur, Texas.

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Corrections & Amplifications

A joint venture between Exxon Mobil Corp. and Qatar Petroleum called Golden Pass Products is asking federal authorities for permission to export liquefied natural gas from a terminal near Port Arthur, Texas. A Corporate News article about the venture in some editions Saturday incorrectly said the terminal is in Louisiana.

(WSJ Aug. 23, 2012)

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HOUSTON -- A joint venture between Exxon Mobil Corp. and Qatar Petroleum is asking federal authorities for permission to export large quantities of liquefied natural gas made in the U.S. from an existing terminal in Louisiana, an executive said Friday.

The move acknowledges the dramatic shift in energy markets produced by the development of techniques to produce natural gas from shale formations across the U.S.

After years of fretting about natural gas scarcity and spending billions constructing import terminals to bring the fuel from places as far as Qatar and West Africa, energy companies now seek to turn the U.S. into a major energy exporter.

"The market changed from what we originally envisioned," said Bill Davis, project executive for the joint venture, Golden Pass Products LLC. "Something changed along the way -- it was the discovery of vastly significant gas resources."

Mr. Davis said it could take several years to get regulatory approval and up to five years to build the liquefaction facilities at the terminal.

Proponents say that exports will boost the U.S. economy and create jobs, while critics charge that exporting will raise prices for domestic consumers and lead to greater use of the drilling method known as hydraulic fracturing, which some environmentalists fear could cause pollution.

Credit: By Angel Gonzalez and Ben Lefebvre

Subject: Natural gas; Petroleum industry; Energy policy; International trade; Regulatory approval

Location: Texas United States--US Louisiana

Company / organization: Name: Cheniere Energy Inc; NAICS: 211111; Name: Qatar Petroleum; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2012

Publication date: Aug 18, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1033807367

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1033807367?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon to Buy Denbury's Bakken Acreage for $1.6 Billion

Author: González, Ángel

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Sep 2012: n/a.

ProQuest document link

Abstract:

Exxon Mobil Corp. agreed to acquire Denbury Resources Inc.'s Bakken assets in North Dakota and Montana for $1.6 billion in cash, a move that increases its production acreage in the prolific oil shale region by nearly 50%.

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HOUSTON--In a bid for more U.S. oil production, Exxon Mobil Corp. agreed to buy Denbury Resources Inc.'s assets in the Bakken Shale for $1.6 billion in cash and interests in two oil fields.

The deal gives Exxon 50% more acreage in the Bakken Shale, an emerging oil field that this year helped make North Dakota the second-largest oil-producing state in the country, after Texas.

It also gives Exxon, the country's largest natural-gas producer, the opportunity to place more chips on unconventional oil; the company has been criticized for betting too much on natural gas, which is much less profitable than oil amid the natural-gas market glut unleashed by hydraulic fracturing.

"It is no surprise" that Exxon, the world's largest publicly traded oil company, continues to "attempt to scale up its presence in tight oil and liquids rich unconventional plays," said analysts with Simmons & Co. in a research note. The analysts added that after the purchase the Bakken will become Irving, Texas-based Exxon's largest unconventional-oil-rich play after Canada's oil sands.

The agreement comes amid increased interest by international oil companies, which for years have struggled to grow, in so-called tight oil, which can be freed from shale rock formations with hydraulic fracturing, or "fracking," technology. Production in these tight oil fields can be boosted quickly when enough capital is invested--a perfect fit for big oil companies with deep pockets and a mandate to extract more oil. Last week Royal Dutch Shell PLC bought unconventional oil assets from Chesapeake Energy Corp. for $1.94 billion.

Exxon is buying 196,000 net acres of land in North Dakota and Montana, the entirety of Denbury's assets in the Bakken, and is giving Denbury in return its interests in the Hartzog Draw field in Wyoming and the Webster field in Texas, plus the cash.

The assets Exxon is acquiring from Denbury are expected to produce 15,000 barrels of oil equivalent per day in the second half of 2012. The net production from the interests Exxon is transferring to Denbury amounts to 3,600 barrels of oil equivalent per day.

Denbury said it also agreed in principle to either purchase an interest in the carbon-dioxide reserves in Exxon Mobil's LaBarge Field in southwestern Wyoming or to purchase incremental carbon dioxide from that field. Carbon dioxide is often used by oil companies to increase the amount of oil they can get from aging fields, a technique known as enhanced oil recovery.

The amount of cash Denbury receives will be reduced with the purchase of an interest in carbon-dioxide reserves. The deal is expected to close in the fourth quarter. For Denbury, the Bakken was "not a core focus," said Jason Wangler, an analyst with Wunderlich Securities, Inc. Now it can focus on its specialty, which is enhanced oil recovery, Mr. Wangler added.

Denbury plans to use the cash proceeds to purchase additional oil fields in the Gulf Coast or Rocky Mountain regions, for capital expenditures and to repay debt.

Denbury also plans to resume its stock-repurchase program, under which about $305 million of the $500 million authorized in October 2011 remains.

Melodie Warner contributed to this article.

Write to Melodie Warner at

Credit: By Ángel González

Subject: Petroleum industry; Natural gas utilities; Carbon dioxide; Oil exploration; Statistical data

Location: Montana Texas North Dakota

Company / organization: Name: Denbury Resources Inc; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Sep 20, 2012

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1041224014

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1041224014?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Will Buy Shale Assets for $1.6 Billion

Author: Gonzalez, Angel

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Sep 2012: B.4.

ProQuest document link

Abstract:

In a bid for more U.S. oil production, Exxon Mobil Corp. agreed to buy Denbury Resources Inc.'s assets in the Bakken Shale for $1.6 billion in cash and interests in two oil fields.

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HOUSTON -- In a bid for more U.S. oil production, Exxon Mobil Corp. agreed to buy Denbury Resources Inc.'s assets in the Bakken Shale for $1.6 billion in cash and interests in two oil fields.

The deal gives Exxon 50% more acreage in the Bakken Shale, an emerging oil field that this year helped make North Dakota the second-largest oil-producing state in the country, after Texas.

The agreement comes amid increased interest by international oil companies, which for years have struggled to grow, in so-called tight oil, which can be freed from shale rock formations with hydraulic fracturing, or "fracking," technology. Production in these tight oil fields can be boosted quickly when enough capital is invested -- a perfect fit for big oil companies with deep pockets and a mandate to extract more oil. Last week Royal Dutch Shell PLC bought unconventional oil assets from Chesapeake Energy Corp. for $1.94 billion.

The amount of cash Denbury receives will be reduced with the purchase of an interest in carbon-dioxide reserves. The deal is expected to close in the fourth quarter. For Denbury, the Bakken was "not a core focus," said Jason Wangler, an analyst with Wunderlich Securities Inc. Now it can focus on its specialty, which is enhanced oil recovery, Mr. Wangler added.

Denbury plans to use the cash proceeds to purchase additional oil fields in the Gulf Coast or Rocky Mountain regions, for capital expenditures and to repay debt.

Denbury also plans to resume its stock-repurchase program, under which about $305 million of the $500 million authorized in October 2011 remains.

---

Melodie Warner contributed to this article.

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Credit: By Angel Gonzalez

Subject: Oil fields; Hydraulic fracturing; Petroleum industry; Oil reserves; Petroleum production; Capital expenditures; Natural gas; Asset acquisitions

Location: United States--US Texas North Dakota

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Chesapeake Energy Corp; NAICS: 211111; Name: Denbury Resources Inc; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Classification: 2330: Acquisitions & mergers; 8510: Petroleum industry; 9190: United States

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.4

Publication year: 2012

Publication date: Sep 21, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1041315031

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1041315031?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Buys Canadian Gas Driller for $2.63 Billion

Author: McKinnon, Judy; Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Oct 2012: n/a.

ProQuest document link

Abstract:

Exxon Mobil Corp. said Wednesday it agreed to buy Canadian oil and natural-gas producer Celtic Exploration Ltd. for 2.59 billion Canadian dollars (US$2.63 billion) in a deal that expands the oil giant's North American shale-gas portfolio at a time when gas prices--and asset values--are suffering from a continent-wide glut.

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The companies said Exxon's Canadian unit is offering C$24.50 a share for Calgary-based Celtic's outstanding shares, plus half a share of a new company that will be created to hold several assets not included in the purchase. The cash portion of the deal represents a 35% premium to Celtic's closing price of C$18.12 in Toronto Tuesday. Including debt considerations, the two companies said the deal was worth C$3.1 billion.

The deal is Exxon's largest since the 2010 purchase of natural-gas-focused XTO Energy for about $26 billion, a transaction that many analysts say was a poorly timed effort to get in on the shale-gas boom. Overproduction of natural gas sent U.S. prices to a decade low earlier this year.

Celtic's production and proved reserves are heavily focused on natural gas versus liquids, note analysts with Raymond James Financial, with about 76% of its reserves in gas. But they are just a tiny fraction of Exxon's estimated daily production of 4,368 million barrels of oil equivalent for 2012, and year-end 2011 proved reserves of 24.9 billion barrels of oil equivalent.

Exxon continues to take a long-term perspective on natural gas, expecting it to be a fuel of choice globally in decades to come.

"This latest deal, similar to XTO in some respects--albeit on a much smaller scale--can be thought of as Exxon's attempt to dollar-cost average what, in retrospect, was clearly not an optimally timed deal," Raymond James said in its research note.

It is also the latest in a string of big deals by foreign buyers in the Canadian oil patch. Ottawa faces a Friday deadline to decide whether to green-light a $5.8 billion proposal by Malaysian state oil company Petroliam Nasional Bhd., or Petronas, to buy Progress Energy Resources Corp., another Canadian gas producer.

In July, Beijing-controlled Cnooc Ltd. said it agreed to buy Nexen Inc., one of Canada's biggest oil companies, for $15.1 billion. Amid government reviews of those two deals, Ottawa has promised to clarify its criteria for big, foreign, state-owned acquirers. Exxon's deal isn't likely to attract the same scrutiny since it isn't a state-owned buyer. It is also making its acquisition of Celtic through a Canadian affiliate, which has a long history working in Canada.

"This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio," Andrew Barry, president of Exxon Mobil Canada, said in a statement.

The value of a company's reserves can change over time based on how it develops them. Like many smaller firms, Celtic acquired a large position in a number of shale fields and used cash flow from production to keep growing. More selective drilling and exploration over time--a strategy Exxon has said previously it is pursuing in its acquisition of XTO--can lead to larger reserves.

"Exxon has the sufficient size and scope that we don't have to produce everything available to keep cash flow going. We can step back and develop long-term plans to produce when it's most optimal," said Alan Jeffers, an Exxon Mobil spokesman.

Canadian natural-gas production may be destined for overseas export through liquefied natural-gas projects that are proposed for Canada's Pacific Coast. Mr. Jeffers said Exxon is still in the early stages of evaluating taking part in such projects.

Around midday in Toronto, Celtic shares were up C$8.14, or 45%, to C$26.26. A number of other small Canadian gas producers saw their stock price rise Wednesday after the Exxon deal.

Exxon's proposed deal includes Celtic's current production of 72 million cubic feet a day of natural gas and 4,000 barrels a day of crude, condensate and natural-gas liquids. Celtic is focused on exploration, development and production of crude oil and natural-gas resources primarily in west central Alberta.

The two companies said they plan to spin off several other assets into a new company. Representatives for Celtic weren't immediately available to comment.

The deal, which includes a C$90 million break-up fee payable under certain circumstances by Celtic, is subject to Celtic shareholder approval and approval by Canadian regulators.

Angel Gonzalez contributed to this article.

Write to Judy McKinnon at

Credit: By Judy McKinnon And Tom Fowler

Subject: Acquisitions & mergers; Oil reserves; Natural gas; Petroleum industry

Location: United States--US Canada

Company / organization: Name: Nexen Inc; NAICS: 211111; Name: Progress Energy Resources Corp; NAICS: 221122; Name: Celtic Exploration Ltd; NAICS: 211111; Name: Raymond James Financial Inc; NAICS: 523120, 523930; Name: Petronas; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Oct 17, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1112372790

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1112372790?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Buys Canadian Gas Driller for $2.63 Billion

Author: McKinnon, Judy; Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Oct 2012: n/a.

ProQuest document link

Abstract:

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Full text:

Celtic's production and proved reserves are heavily focused on natural gas versus liquids, note analysts with Raymond James Financial, with about 76% of its reserves in gas. But they are just a tiny fraction of Exxon's estimated daily production of 4.368 million barrels of oil equivalent for 2012, and year-end 2011 proved reserves of 24.9 billion barrels of oil equivalent.

Exxon continues to take a long-term perspective on natural gas, expecting it to be a fuel of choice globally in decades to come.

"This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio," Andrew Barry, president of Exxon Mobil Canada, said in a statement.

Around midday in Toronto, Celtic shares were up C$8.14, or 45%, to C$26.26. A number of other small Canadian gas producers saw their stock price rise Wednesday after the Exxon deal.

The two companies said they plan to spin off several other assets into a new company. Representatives for Celtic weren't immediately available to comment.

The deal, which includes a C$90 million break-up fee payable under certain circumstances by Celtic, is subject to Celtic shareholder approval and approval by Canadian regulators.

Angel Gonzalez contributed to this article.

Write to Judy McKinnon at

Credit: By Judy McKinnon And Tom Fowler

Subject: Acquisitions & mergers; Oil reserves; Natural gas; Petroleum industry

Location: United States--US Canada

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Oct 18, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1112565043

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1112565043?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Acquires Canadian Gas Driller

Author: McKinnon, Judy; Fowler, Tom

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Oct 2012: B.2.

ProQuest document link

Abstract:

Exxon Mobil Corp. said Wednesday it agreed to buy Canadian oil and natural-gas producer Celtic Exploration Ltd. for 2.59 billion Canadian dollars (US$2.63 billion) in a deal that expands the oil giant's North American shale-gas portfolio at a time when gas prices -- and asset values -- are suffering from a continent-wide glut.

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Full text:

Exxon Mobil Corp. said Wednesday it agreed to buy Canadian oil and natural-gas producer Celtic Exploration Ltd. for 2.59 billion Canadian dollars (US$2.63 billion) in a deal that expands the oil giant's North American shale-gas portfolio at a time when gas prices -- and asset values -- are suffering from a continent-wide glut.

The companies said Exxon's Canadian unit is offering C$24.50 a share for Calgary-based Celtic's shares outstanding, plus half a share of a new company that will be created to hold several assets not included in the purchase. The cash portion of the deal represents a 35% premium to Celtic's closing price of C$18.12 in Toronto Tuesday. Including debt considerations, the two companies said the deal was worth C$3.1 billion.

Celtic's production and proved reserves are heavily focused on natural gas versus liquids, note analysts with Raymond James Financial, with about 76% of its reserves in gas. But they are just a tiny fraction of Exxon's estimated daily production of 4.368 million barrels of oil equivalent for 2012, and year-end 2011 proved reserves of 24.9 billion barrels of oil equivalent.

Exxon continues to take a long-term perspective on natural gas, expecting it to be a fuel of choice globally in decades to come.

"This latest deal, similar to XTO in some respects -- albeit on a much smaller scale -- can be thought of as Exxon's attempt to dollar-cost average what, in retrospect, was clearly not an optimally timed deal," Raymond James said in its research note.

It is also the latest in a string of big deals by foreign buyers in the Canadian oil patch.

In July, Beijing-controlled Cnooc Ltd. said it agreed to buy Nexen Inc., one of Canada's biggest oil companies, for $15.1 billion.

Exxon's deal isn't likely to attract the same scrutiny since it isn't a state-owned buyer. It is also making its acquisition of Celtic through a Canadian affiliate, which has a long history working in Canada.

---

Angel Gonzalez contributed to this article.

Subscribe to WSJ:

Credit: By Judy McKinnon and Tom Fowler

Subject: Acquisitions & mergers

Location: United States--US Canada

Company / organization: Name: Celtic Exploration Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Classification: 9180: International; 8510: Petroleum industry; 2330: Acquisitions & mergers

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.2

Publication year: 2012

Publication date: Oct 18, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1112644436

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1112644436?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Nears Sale of South Iraq Stake

Author: Hassan Hafidh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Oct 2012: n/a.

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Anglo-Dutch oil-and-gas company Royal Dutch Shell PLC has a 15% stake in the West Qurna-1 development contract, while the remaining 25% is owned by the Iraqi state oil company.

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Exxon Mobil Corp. is in talks to sell its stake in a contract to develop a multibillion-dollar oil project in southern Iraq while gearing up to start a controversial drilling effort in the Kurdistan region, people familiar with the matter said on Thursday.

The U.S. energy giant's move to exit southern Iraq and push forward with its plans in Kurdistan, in northern Iraq, suggests the central government's efforts to keep it operating solely in southern Iraq are likely to fail. This comes as talks between the Kurdistan regional government, or KRG, and the federal government in Baghdad aimed at resolving differences over oil rights appear to have stalled again after a brief period of progress.

"Exxon has informed top Iraqi government officials that it is intending to leave," a person familiar with the Iraqi oil ministry said.

Exxon Mobil is in talks with international oil companies about selling its 60% stake in a service agreement to develop the massive West Qurna-1 oil field in southern Iraq, one person familiar with the Iraqi Oil Ministryand another person familiar with Exxon Mobil's operations in Kurdistan said on Thursday. Exxon's 2010 deal with the Iraqi central government to improve production in the West Qurna-1 field was never expected to be lucrative under the best of circumstances, the person said.

The government had agreed to pay Exxon Mobil and its partners $1.90 for each additional barrel of oil they pumped after refurbishing the already producing field. The fees would barely be enough to cover the companies' costs. Other deals in southern Iraq between Baghdad and foreign oil companies had similar terms.

Anglo-Dutch oil-and-gas company Royal Dutch Shell PLC has a 15% stake in the West Qurna-1 development contract, while the remaining 25% is owned by the Iraqi state oil company.

Shell declined to comment when asked whether it is interested to buy Exxon Mobil's stake in West Qurna-1 field.

Meanwhile, Exxon Mobil s planning to start exploratory drilling in Kurdistan as soon as early 2013, people with knowledge of Exxon Mobil and the KRG said, after delaying such plans for months in order to resolve a dispute with Baghdad over deals signed with the KRG.

Exxon Mobil declined to comment about the talks on exiting southern Iraq and plans to begin drilling in Kurdistan.

The U.S. company has already ordered the purchase of oil-well casing heads and is negotiating a contract with an oil-services firm to start drilling in Kurdistan, said another person familiar with Exxon Mobil's operations in the region. "They have opened an office in Erbil," the KRG capital, he said.

"We know they have been active," an executive at a Western oil company in Kurdistan said about Exxon Mobil.

Two of the people familiar with the situation said Exxon Mobil would start drilling operations near Mosul in one of the disputed areas that have inflamed tensions between Baghdad and Erbil.

In November last year, Exxon Mobil provoked protest from Baghdad when it became the first major international oil company to sign petroleum contracts with the KRG despite Baghdad's threats to expel it from a contract in southern Iraq. Exxon Mobil signed a deal to develop six blocks with the KRG, which is locked in a feud with the Arab-dominated central government over land and oil rights.

Three of the blocks are in areas disputed by Erbil and Baghdad.

Earlier this year, U.S. oil giant Chevron Corp., France's Total SA and the oil-producing arm of Russia's OAO Gazprom followed Exxon Mobil's lead by striking their own deals in Kurdistan.

The Iraqi central government has excluded companies that signed deals with the KRG from participating in auctions for future oil-exploration rights in southern Iraq.

The central government's reaction suggests Kurdish oil developments still face huge political hurdles. Leaders in Baghdad and Erbil disagree on the appropriate distribution of power between the regional and central governments. The Kurds have signed at least 30 oil deals despite the central government's objections, and the oil ministry in Baghdad has considered those contracts null and void.

This week, a high-level committee failed to convene a planned meeting aimed at resolving the oil dispute between Baghdad and Erbil, casting doubt on recent progress with the dispute. Iraq's federal oil minister Abdul Kareem Luaiby and Kurdish oil minister Ashti Hawrami, both members of the committee, met in Baghdad three weeks ago to discuss a draft hydrocarbon law that would regulate the oil industry and to try to agree on a version that would be acceptable to both sides. The country's parliament hasn't been able to advance toward enacting the legislation for years, as Baghdad and Erbil have been at loggerheads over oil rights.

Last month, the central government decided to pay international oil companies working in Kurdistan some 1 trillion Iraqi dinars [$850 million] and said the KRG should increase exports to 200,000 barrels a day from this month until the end of the year via Iraq's federally controlled pipelines, but that settled only part of the dispute between them.

"So far there is no agreement," said Firhad al-Atroshi, a Kurdish parliamentarian, and a member of the high-level committee set up to try to reach an agreement on the draft oil law.

The hydrocarbon law will be important in settling a long-standing dispute between Baghdad and the regional government in Kurdistan. Baghdad doesn't recognize scores of deals signed by the Kurds with foreign companies. The central government wants to review these deals and bring them in line with oil laws valid in Baghdad.

Kurds are opposing a new version of the law that assigns powers of the highest hydrocarbon authority, the Federal Oil and Gas Council, to the federal prime minister, while the Kurds want powers to rest with a collective authority whose members are to be nominated by the parliament.

Baghdad and the Kurds are most divided over the extent of decentralization and federalism in the oil sector.

"We are opposing a provision of the current draft law that forbids regions within Iraq from having the right to negotiate and sign contracts," said Mr. al-Atroshi.

Some experts on the region say that both sides need to make some concessions to reach agreement on the draft law, while others say the Kurds wouldn't accept Baghdad controlling the region's oil resources and changing deals already signed with international oil companies.

"Compromise on the oil and gas issue has always been important because of a fundamental contradiction between Baghdad's and Erbil's vision of power and sovereignty in Iraq," said Raad Alkadiri, director for country strategies and partner at PFC Energy, the Washington, D.C.-based strategic-advisory firm.

"I do not expect the Kurds to be willing to compromise away their own oil law [which gives them exclusive right to govern their own resources] and the control over their natural resources, as this is the economic fundament for their retention of their far-reaching autonomy over the long term," said Samuel Ciszuk, an analyst at U.K.-based consultancy KBC Energy Economics.

The Kurds also disagree with the current draft of the Iraq hydrocarbon law because it gives the federal oil ministry exclusive powers that overwhelm those of the proposed Federal Oil and Gas Council, Mr. al-Atroshi said.

Write to Hassan Hafidh at

Credit: By Hassan Hafidh

Subject: Petroleum industry

Location: United States--US Baghdad Iraq Kurdistan

Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Oct 18, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1112811774

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1112811774?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Belgians Probe Death of Exxon Manager

Author: Torello, Alessandro

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Oct 2012: n/a.

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BRUSSELS--An executive with U.S. oil giant Exxon Mobil Corp. was shot dead in Brussels earlier this month after leaving a restaurant with his wife, Belgian authorities said Friday.

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BRUSSELS--Belgian authorities are seeking clues about the death of an Exxon Mobil Corp. manager, killed earlier this month with no apparent motive after a Sunday dinner at a local restaurant.

Nicholas Mockford was killed on the night of Oct. 14 as he was leaving a restaurant on the outskirts of the Belgian capital after dining there with his wife, authorities said Friday. He was shot three times, while his wife was fiercely beaten, but not shot.

"All lines of inquiry are being pursued," Geneviève Seressia, a spokeswoman for the investigating judge, said Friday. "There was no theft," she said.

Two people attacked the Mockfords, Ms. Seressia said.

Mr. Mockford was a department manager at Exxon Mobil's offices in Mechelen, a town just outside Brussels where about 1,000 employees work at the company's regional headquarters, a spokesman for Exxon Mobil Belgium said. Mr. Mockford had worked at Exxon for many years, and he had been posted in Belgium for several, the spokesman said, without giving specific details.

Mr. Mockford's work was related to chemicals and their use in making plastics. At a conference two years ago, he was listed as a speaker on possible alternatives to phthalate plasticizer, a material that is used to soften polyvinyl chloride, which is in turn used to make window frames and other things.

Exxon Mobil said in a statement that there is no indication the killing is linked to Mr. Mockford's work.

"Mr. Mockford was a department manager at our office close to Brussels, but we have no indication that the incident was work-related," the company said in a statement. "Our thoughts are with his family, friends and colleagues and we are supporting them as best we can at this very difficult time," it said.

Mr. Mockford was a member of a golf club just on the outskirts of Brussels. He played in a competition there the very day he was killed, the club's sports manager, Andrew Watson, said.

"He wasn't the greatest golfer, but he was a very nice person," Mr. Watson said, adding that Mr. Mockford would show up at the club--which he had joined at least six years ago--every couple of weekends if not more.

A resident of Grimbergen, a wealthy neighborhood just outside Brussels, Mr. Mockford was very discreet and polite. "He didn't talk an awful lot about his work," Mr. Watson said, adding that Mr. Mockford, who also spoke French but not Dutch, used to go to the club on the weekend, even though he didn't seem to travel much for work.

Sarah Kent in London contributed to this article.

Write to Alessandro Torello at

Credit: By Alessandro Torello

Subject: Petroleum industry; Manycountries

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Oct 26, 2012

Section: World

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1115270194

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1115270194?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon's Profit Slips

Author: González, Ángel; Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Nov 2012: n/a.

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Abstract:

Exxon Mobil Corp. reported a 7.4% drop in third-quarter earnings on lower production and weaker prices for its natural gas, offsetting benefits from stronger margins in its refining arm.

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Exxon Mobil Corp.'s third-quarter earnings fell 7.4% as it fetched lower prices for oil and gas and production fell to its lowest level in three years.

Profit in its refining segment nearly doubled, however, enabling the world's largest publicly traded oil company by market capitalization to beat Wall Street expectations.

Exxon posted a profit of $9.57 billion, or $2.09 a share, down from $10.33 billion, or $2.13 a share, a year earlier. Revenue decreased 7.7% to $115.71 billion.

Analysts polled by Thomson Reuters most recently projected earnings of $1.95 a share on revenue of $112.4 billion.

While the entire oil industry has suffered from unstable prices for crude and natural gas in recent quarters, Exxon's production woes underscore how challenging it is for the biggest oil companies to boost production in a meaningful way despite massive investments.

The Texas oil giant's output fell 7.5% to an average of about four million barrels a day, the lowest level since the third quarter of 2009. Excluding the effect of divestitures, production-sharing contracts and quotas set by the Organization of Petroleum Exporting Countries, production fell 2.9%, a number that analysts consider disappointing. Anglo-Dutch oil giant Royal Dutch Shell PLC, which also reported results Thursday, saw production fall 1% from a year earlier, even as analysts had expected a 2% increase.

"Clearly chronic production declines are not what we want to see," said Pavel Molchanov, an analyst with Raymond James.

However, some of Exxon's production decline involved relatively unprofitable U.S. natural gas, said analysts with Simmons & Co. Exxon became the largest natural-gas producer in the U.S. after its acquisition in 2010 of XTO Energy Inc. for about $26 billion.

David Rosenthal, Exxon's vice president of investor relations, said in a conference call that a decrease in U.S. production reflects in part the fact that the company has been moving drilling rigs from natural-gas-rich shale areas to more profitable oil-rich regions. In the second quarter about half of the rigs were focused on oil or so-called "liquids rich" formations, while more recently about two-thirds of the rigs were aimed at liquids, he said, adding that production in these areas is beginning to ramp up as the company is moving from studying the formations to full-fledged development.

Exxon has recently sought to boost its reserves and production, especially of more profitable crude oil, by buying assets in the prolific Bakken shale in North Dakota from Denbury Resources Inc. It also has struck ambitious joint ventures with giants like OAO Rosneft to tap massive quantities of Arctic resources, but that is an effort that could take many years.

Last month, Exxon said it agreed to buy Canadian oil and natural-gas producer Celtic Exploration Ltd. for about $2.63 billion--its largest such deal since it acquired XTO--as the company remains optimistic about long-term prospects for the sector.

Mr. Rosenthal said that Exxon's production is about 1% below its forecast, reflecting divestitures, downtime due to maintenance and higher-than-expected prices that had a negative impact on the amount of oil Exxon receives in production-sharing contracts. But he pointed to a list of big oil projects such as the Kearl oil-sands project in Canada that "are all in the process of starting up as planned," and other projects in coming years in Indonesia, Papua New Guinea and Australia that will add a significant production boost.

In the latest quarter, exploration-and-production earnings declined 29% to $5.97 billion amid lower prices for liquids and natural gas and lower production. Refining-and-marketing earnings more than doubled to $3.19 billion mainly on stronger refining margins.

Write to Ángel González at and Tom Fowler at

Credit: By Ángel González And Tom Fowler

Subject: Petroleum industry; Financial performance

Location: United States--US

Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Celtic Exploration Ltd; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Hess Corp; NAICS: 447110, 324110, 211111; Name: XTO Energy Inc; NAICS: 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Nov 1, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1124838024

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1124838024?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Corporate News: Exxon Profit Slips As Production Falls

Author: Gonzalez, Angel; Fowler, Tom

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Nov 2012: B.7.

ProQuest document link

Abstract:

While the entire oil industry has suffered from unstable prices for crude oil and natural gas in recent quarters, Exxon's production woes underscore how challenging it is for the biggest oil companies to boost production in a meaningful way despite massive investments.

Links: 360 Link to Full Text

Full text:

Exxon Mobil Corp.'s third-quarter earnings fell 7.4% as it fetched lower prices for oil and gas and production fell to its lowest level in three years.

Profit in its refining segment nearly doubled, however, enabling the world's largest publicly traded oil company by market capitalization to beat Wall Street expectations.

Exxon posted a profit of $9.57 billion, or $2.09 a share, down from $10.33 billion, or $2.13 a share, a year earlier. Revenue decreased 7.7% to $115.71 billion.

David Rosenthal, Exxon's vice president of investor relations, said in a conference call that a decrease in U.S. production reflects in part the fact that the company has been moving drilling rigs from natural-gas-rich shale areas to more-profitable oil-rich regions. In the second quarter about half of the rigs were focused on oil or so-called "liquids rich" formations, while more recently about two-thirds of the rigs were aimed at liquids, he said, adding that production in these areas is beginning to increase as the company is moving from studying the formations to full-fledged development.

Exploration-and-production earnings declined 29% to $5.97 billion amid lower prices for liquids and natural gas and lower production. Refining-and-marketing earnings more than doubled to $3.19 billion, mainly on stronger margins.

Separately, Shell said it was shifting the focus of its energy production in North America toward oil as weak prices from the shale-gas glut hurt its earnings.

Shell said profit on the basis of clean current cost of supplies -- a figure that strips gains or losses from inventories and other nonoperating items out of net profit -- fell to $6.56 billion in the third quarter, down 6.3%.

Including a $1.01 billion gain on the value of inventories and a $432 million impairment, mainly on the value of U.S. natural-gas assets, and U.K. tax changes, Shell's net profit for the quarter was $7.14 billion, up 2.3%. Revenue fell 8.4%.to $115.43 billion.

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Credit: By Angel Gonzalez and Tom Fowler

Subject: Petroleum industry; Financial performance; Corporate profits

Location: United States--US

Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110

Classification: 9190: United States; 8510: Petroleum industry; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.7

Publication year: 2012

Publication date: Nov 2, 2012

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1125266866

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1125266866?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

The New Haven for Investors; Short-Term Bonds of Exxon and J&J Offer Lower Yields Than Similar Treasurys

Author: McGee, Patrick; Burne, Katy

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Nov 2012: n/a.

ProQuest document link

Abstract:

Mr. Bianco recalled a few similar instances in the past 30 years but none lasted long. Since the turn of the 20th century, Treasurys have formed the benchmark for fixed-rate U.S. company debt. "Every day the debt and credit profile of the U.S. gets worse, yet you have corporate America that is lean and mean," said Jason Graybill, senior managing director at Carret, who oversees a $1.2 billion bond portfolio and sold Treasurys 18 months ago to pile into more corporate debt.

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Treasurys have a new rival for safe-haven status: U.S. companies.

Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government.

For now, just a handful of relatively short-term bonds yield less than comparable Treasury bonds. But some market observers said some fundamental changes in the financial health of U.S. companies relative to the government, including the fact that some corporations are more highly rated than Uncle Sam, suggest it could become a longer-lasting trend.

"If it grows to be more like dozens of issues, then it stops becoming an anomaly and it becomes a big deal," said James Bianco, founder of Bianco Research in Chicago. Mr. Bianco recalled a few similar instances in the past 30 years but none lasted long.

Since the turn of the 20th century, Treasurys have formed the benchmark for fixed-rate U.S. company debt. Companies and investors measure corporate borrowing rates relative to what the government pays. But several forces are combining to upend that market convention.

Money is pouring into highly rated U.S. corporate bonds at an even faster pace than Treasury debt, according to fund-tracker Lipper, as buyers clamor for investments perceived as safe that typically also yield a bit more than Treasurys. A shrinking supply of top-rated debt is also driving investors toward the highest-rated U.S. companies. That demand has driven up bond prices and pushed down yields.

The soaring demand has enabled companies of all sizes to raise $1.2 trillion from issuing debt this year, already the busiest year on record, according to data provider Dealogic. U.S. corporations, now sitting on $1.73 trillion of cash and borrowing at the lowest rates in history, are arguably in the best shape ever.

Should the economy continue to pick up steam, U.S. companies will become even healthier, some argue. By contrast, the Treasury is burdened with more debt than ever, and government deficits are likely to keep increasing for the foreseeable future.

The prospect of further upheaval, as Congress battles whether to extend a raft of tax cuts and clip spending, is adding to the uncertainty. Some investors worry that the country could face a second credit-rating downgrade, following Standard & Poor's cut below triple-A last year.

"Every day the debt and credit profile of the U.S. gets worse, yet you have corporate America that is lean and mean," said Jason Graybill, senior managing director at Carret, who oversees a $1.2 billion bond portfolio and sold Treasurys 18 months ago to pile into more corporate debt. "It's only a matter of time" before companies offer new debt below Treasury yields, he said.

Still, some observers argue that yields on corporate bonds could soon rise. They said the bonds of Exxon and Johnson & Johnson are short-term bonds that are inherently volatile. And others said U.S. government debt is still widely seen as the safest debt available. The market is larger and much more active, making it more attractive than corporate debt to some investors.

"The Treasury has an unlimited printing press and there will always be demand," said Kam Poon, portfolio manager of short-term fixed-income strategies at Aberdeen Asset Management in Philadelphia. Mr. Poon, who oversees $1.1 billion of bonds, has sold corporate bonds in which the yields have been close to Treasurys, as well as securities whose yields have dipped below Treasurys.

The phenomenon has been seen in what is known as the secondary bond market, in which bonds are traded after they are first issued.

Bonds of Exxon coming due in 13 months were quoted on Tuesday at 0.01 percentage point less than the comparable Treasury, according to Benchmark Solutions, a pricing service. Bonds of Johnson & Johnson due in May 2014 also recently traded at 0.01 percentage point less than Treasurys. Both are rated triple-A by S&P. Representatives for Exxon and Johnson & Johnson declined to comment.

In the new-issue market, companies continue to set records. Microsoft Corp. on Friday sold five-year bonds at a yield of just 0.27 percentage point above comparable Treasurys, the narrowest premium on such debt going back to 1994, according to Dealogic.

People familiar with the sale said Microsoft wanted to take advantage of low rates. Microsoft will put the $2.25 billion it raised toward early repayment of similar debt the company issued in February 2011; its new five-year debt Friday priced to yield 0.875% compared with 2.5% last year.

"These are truly unprecedented conditions for blue-chip companies in the debt markets," said Brent Callinicos, treasurer of Internet-search firm Google Inc. Google bonds due in 2014 yield just 0.02 percentage point over Treasurys.

The phenomenon could become more widespread as investors continue to search among a shrinking pool of highly rated bonds. According to Credit Suisse, the share of world-wide government debt rated triple-A has fallen to 39% of the total from 58% in early 2010.

Corporate bonds "are definitely the new safe havens in this world," said Fer Koch, director of U.S. credit strategy at Credit Suisse.

Write to Patrick McGee at and Katy Burne at

Credit: By Patrick McGee and Katy Burne

Subject: Treasuries; Corporate debt; Investment policy; Bond markets; Bond issues

Location: United States--US

Company / organization: Name: Congress; NAICS: 921120; Name: Microsoft Corp; NAICS: 334611, 511210; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Nov 7, 2012

Section: Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1139208157

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1139208157?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

The New Haven for Investors --- Short-Term Bonds of Exxon and J&J Offer Lower Yields Than Similar Treasurys

Author: McGee, Patrick; Burne, Katy

Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Nov 2012: C.1. [Duplicate]

ProQuest document link

Abstract:

Links: 360 Link to Full Text

Full text:

Treasurys have a new rival for safe-haven status: U.S. companies.

The phenomenon has been seen in what is known as the secondary bond market, in which bonds are traded after they are first issued.

Subscribe to WSJ:

Credit: By Patrick McGee and Katy Burne

Subject: Treasuries; Bond markets; Credit markets (wsj)

Location: United States--US

Classification: 9190: United States; 3400: Investment analysis & personal finance

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: C.1

Publication year: 2012

Publication date: Nov 7, 2012

column: Credit Markets

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1139457594

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1139457594?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Iraq Says Exxon Seeks Bids on Oil-Field Stake

Author: Hassan Hafidh

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Nov 2012: n/a.

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BAGHDAD--U.S. energy company Exxon Mobil Corp. has asked interested oil companies to submit offers in December to buy its stake in a multibillion-dollar project in southern Iraq, Iraq's deputy prime minister for energy affairs said Thursday.

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Exxon, which upset Baghdad by signing a deal last year to explore for oil in Iraq's semiautonomous Kurdish region, has informed Iraq of its wish to sell its 60% stake in the West Qurna-1 project, Hussein al-Shahristani said in an interview.

"Exxon has started negotiations with companies, and it has set December to receive bids from them," Mr. Shahristani said.

"We are expecting the sale to be finalized by the end of this year," he said.

Exxon declined to comment.

Exxon can only sell its stake to the firms that the Iraqi Oil Ministry has prequalified to win oil and gas contracts in Iraq. "The buyer should be qualified in accordance with the criteria we have set up and Exxon needs to secure the Iraqi government's approval of the buyer before it sells its stake," Mr. Shahristani said.

Earlier in the day, the head of the largest Iraqi oil-production company, the South Oil Co., said Exxon wanted to share data on West Qurna-1 with companies like BP PLC, Eni SpA, Lukoil Holdings and other frms in order to sell part of its stake. The deputy prime minister, however, said Exxon would sell all of its stake.

The venture gets some $1.90 for each extra barrel of oil produced above the 244,000 barrel-a-day baseline.

The withdrawal of Exxon from the gigantic West Qurna-1 oil field wouldn't affect Iraq's plans to increase production, Mr. Shahristani said. "Exxon's departure from West Qurna-1 won't have any effect on our production targets and all [oil] contracting companies working in Iraq are working at high efficiency to up output," he said.

Mr. Shahristani said Iraq's crude-oil production is expected to hit 3.6 million barrels a day in 2013, from above three million barrels a day now. He said Iraq is planning to export some 2.9 million barrels a day in 2013, up from the current 2.6 million barrels a day.

In November last year, Exxon Mobil provoked protest from Baghdad when it became the first major international oil company to sign petroleum contracts with the Kurdistan Regional Government, or KRG, despite Baghdad's threats to expel it from the contract in southern Iraq. Exxon signed a deal to develop six blocks with the KRG, which is locked in a feud with the Arab-dominated central government over land and oil rights.

Earlier this year, U.S. oil company Chevron Corp., France's Total SA and the oil-producing arm of Russia's Gazprom all followed Exxon Mobil's lead by striking their own deals in Kurdistan.

Write to Hassan Hafidh at

Credit: By Hassan Hafidh

Subject: Petroleum production; Petroleum industry; Prime ministers

Location: United States--US Iraq

Company / organization: Name: South Oil Co; NAICS: 211111; Name: Eni SpA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Nov 8, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1143425089

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1143425089?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Cost of Exxon LNG Project Jumps Again

Author: Ross, Kelly

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Nov 2012: n/a.

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Abstract:

The increase illustrates the intensifying cost pressures global oil companies such as Exxon, Chevron Corp. and Royal Dutch Shell PLC face as they seek to tap Asia's growing demand for cleaner-burning fuels by building LNG export terminals in places such as Australia and Papua New Guinea.

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SYDNEY--Exxon Mobil Corp. said Monday that the cost of building a liquefied-natural-gas project in Papua New Guinea had jumped about 20% to US$19 billion due to exchange-rate movements, disputes with landowners and torrential rain.

Chevron said this year that it was reviewing costs at the 43 billion Australian dollar (US$45 billion) Gorgon LNG project in Western Australia state, citing a 20% rise in the Australian dollar since construction started in 2009. Exxon and Shell are also large investors in Gorgon.

The cost of Exxon's LNG project in Papua New Guinea is now expected to rise by $3.3 billion from the previous estimate, the company said in a written statement. The facility was 70%-completed and on track to ship the first cargoes to China, Japan and Taiwan in 2014, Exxon said.

Exxon said the cost overrun would be offset by higher output capacity of 6.9 million metric tons a year, up from 6.6 million tons, as well as a 30% rise in the price of LNG since construction of the project began in 2009.

"Despite the cost increase, it's still the most profitable project under construction in the region," said Matthew Howell, an analyst at energy-industry consultancy Wood Mackenzie. "We don't see the increase affecting its commercial viability."

The price tag for the project has been revised previously. Last year, Exxon raised its estimate to US$15.7 billion from an initial US$15 billion.

The increases underscore the unique challenges companies face in Papua New Guinea, an impoverished Pacific nation better known for its jungles and lawlessness than its energy industry.

Exxon operates and owns 33.2% of PNG LNG, as the project is known. Australia's Oil Search Ltd. and Santos Ltd. own 29% and 13.5%, respectively. The balance is split mostly among the local government and dozens of landowning tribes that frequently stage protests--and violent attacks--against what they say is an unfair distribution of benefits from the project.

Papua New Guinea presents logistical challenges, including that of moving gas from the highlands to the coast via a 190-mile pipeline that traverses rugged terrain at as much as 650 feet above sea level. From the shore, the gas must be transported by a 250-mile underwater pipeline to a processing terminal.

Foreign-exchange accounted for US$1.4 billion of the latest cost increase, Oil Search said. Work stoppages and land-access disputes added US$1.2 billion, it said. An additional US$700 million was pinned on adverse logistics and weather conditions, including rainfall that Exxon said exceeded historic norms for most of the past two years.

Both Oil Search and Santos said they had ample liquidity to cover the additional funding requirements. Their shares fell 3.4% and 2.2%, respectively, in Sydney.

Write to Ross Kelly at

Credit: By Ross Kelly

Subject: Petroleum industry; LNG; Natural gas

Location: Asia United States--US Papua New Guinea Western Australia Australia

Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Nov 12, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1151023956

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1151023956?accountid=7117

Last updated: 2017-11-19

Database: The Wall Street Journal

Exxon Has An Oil Shortage

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2012: n/a.

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The trucks will haul the sands to the $11 billion Kearl oil-sands-processing facility, which will sift out the prized Canadian crude and provide Exxon Mobil Corp. with up to 170,000 barrels of oil a day for decades to come.

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On a forested plain in Alberta next month, massive mechanical shovels will start scooping tons of oil-rich sands and loading them into three-story-tall dump trucks.

The world's largest publicly traded oil company by market capitalization is counting on Kearl and 20 other new projects to jump-start its slumping oil and gas output, which plummeted to three-year lows in its most recent quarter.

Exxon shares have gained 3.9% so far this year, though they are little changed from where they stood five years ago. The shares closed at $88.10 on Wednesday on the New York Stock Exchange.

Some analysts are skeptical the spate of projects--from Indonesia and Papua New Guinea to the deep waters off West Africa--will begin by 2014 as Exxon predicts and deliver the infusion of oil and gas it anticipates. Exxon estimates the projects could increase its daily oil production by up to 880,000 barrels, or about 22% of its current daily output.

"Delays are the rule, not the exception, in this industry," said Fadel Gheit, an analyst with Oppenheimer & Co.

Analysts with UBS expect Exxon's 2012 production to be down 5.7% for the year, compared with an expected 2.9% drop for Chevron Corp., a 2.7% decline for BP PLC and a 2.2% increase for Royal Dutch-Shell.

Increasing oil output has become daunting for energy companies such as Exxon, because big oil fields in easy to reach locations have gotten scarce, and government-controlled oil companies from countries such as Russia and China have become more aggressive, spending freely to outbid Western firms for the rights to the best projects.

There are other obstacles to production growth, including depletion of existing oil fields, which generally lose 5% to 7% of their output per year, according to analysts.

Lysle Brinker, director of energy-equity research for IHS-CERA, said Exxon has a good record for completing major projects close to budget and schedule. "They'd be the first to admit it doesn't always go smoothly, but Exxon has a better reputation than most for hitting its deadlines," Mr. Brinker said.

Exxon declined to discuss the start-up risks associated with specific projects. In discussions with analysts and investors, its executives have stressed they aren't looking to increase production overnight or at the expense of profitability, but bet on big projects that will provide significant profits for the long haul.

Exxon's annual spending on exploration and production projects has increased sharply: It now plans to spend around $37 billion per year through 2016, up from less than $20 billion in 2009.

Off the coast of Angola, Exxon is expecting additional production from an expansion of its Kizomba project, a series of deep-water oil wells that were among the first for that West African nation. With a 40% stake, Exxon will get 40,000 barrels per day of the targeted output.

In Indonesia, an offshore project known as Banyu Urip is expected to produce about 165,000 barrels per day by the end of 2014, with roughly 75,000 barrels for Exxon, a 45% owner.

In Papua New Guinea, meanwhile, a liquefied-natural-gas project is expected to export up to 940,000 cubic feet of gas--equivalent to 166,000 barrels of oil--to China and other Asian markets by 2014.

But the venture is proving more costly than anticipated: Exxon increased the price tag on the project by 21% to $19 billion this month, citing changes in foreign-exchange rates and delays from work stoppages.

The brunt of its projected production growth through 2014, 37%, comes from Canadian oil-sands projects such as Kearl, which has been in the works since 2009.

But the oil-sands projects are in remote locations that require many workers and billions of dollars in capital. They are also hamstrung in reaching customers outside of Canada due to limited pipeline capacity.

The 700,000-barrel-per-day Keystone XL pipeline, which will carry Canadian crude to Gulf coast refiners, is seen as one way around those limitations, but the project has faced stiff opposition from environmentalists.

Final approval of the project was delayed by President Barack Obama because of environmental concerns, but with the election over he is expected by many observers to give final approval. That approval may come with additional environmental requirements, however, which could add costs to and slow development of future oil-sands pipelines.

Even if all of the new projects come to pass, they wouldn't make up for Exxon's possible exit from a burgeoning project in southern Iraq that was expected to produce up to 1.6 million barrels a day for the company by 2016.

Iraqi officials said Exxon recently notified them that it plans to sell its 60% operating stake in the West Qurna project to another firm. The Iraqi government has said Exxon must choose between operating in southern Iraq or in semiautonomous Kurdistan in the north, where Exxon last year signed an agreement to explore for oil in defiance of Baghdad. Exxon has declined to comment on its plans in southern Iraq.

Still, despite the company's challenges, some analysts are loath to bet against Exxon. They estimate that investments such as the Kearl project, and the company's recent $1.6 billion purchase of Denbury Resources Inc.'s holdings in the Bakken Shale oil field in and around North Dakota, will help the company rebound.

Next year "should look better," for Exxon, said Raymond James & Assoc. analyst Pavel Molchanov, who expects the company's output will grow 3%.

Write to Tom Fowler at

Credit: By Tom Fowler

Subject: Oil fields; Petroleum production; Petroleum industry; Oil sands; Natural gas

Location: Indonesia Papua New Guinea

Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Chevron Corp; NAICS: 324110, 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Exxon Mobil Corp; NAICS: 447110, 211111

Publication title: Wall Street Journal (Online); New York, N.Y.

Pages: n/a

Publication year: 2012

Publication date: Nov 28, 2012

Section: Business

Publisher: Dow Jones & Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 1220486534

Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1220486534?accountid=7117

Last updated: 2017-11-20

Database: The Wall Street Journal

Exxon Has an Oil Shortage

Author: Fowler, Tom

Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2012: n/a.